Banking Law

The banking law regulates the operations of the banks and the legal relations of this operations. By this definition, we can suggest that the banking law is about banking and the legal relations of this business. A banking corporation is a commercial enterprise that is legally called as the “Bank” and allowed to be established by the Council of Ministers and that requires the approval of the Undersecretariat to be engaged in its respective field of business, that’s collecting deposits, and be engaged in banking operations. In other words, in order for a business enterprise to engage in banking activities, it has to be established in accordance with the Banking Law or other special laws and has to be granted the right to collect deposits and to perform banking transactions or it must be legally entitled to perform such transactions. Banks must be established as joint stock companies. Such obligation also applies to development and investment banks.

The Banking Law distinguishes between the establishment and the operation of the bank. A bank cannot immediately engage in banking operations as soon as it completes the establishment procedures. The required documents and especially the declaration stipulated in the law must be submitted to the Undersecretariat and to the Ministry of Industry and Commerce for a permit for activity. If the Undersecretariat gives the go-ahead after examining whether “those concerned” has fulfilled the requirements specified under the Banking law and whether they have the necessary qualifications to initiate the banking operations and collect deposits and after the opinion of the Ministry of Industry and Commerce, they are allowed to initiate the banking operations and collect deposits. The same system goes for the branches of foreign banks in Turkey.