1. Overview of the Turkish Banking and Finance Framework
Turkey’s banking and finance law is built around a statutory and regulatory architecture designed to ensure confidence and stability in financial markets, protect depositors and investors, and promote integration with global and EU standards.
The cornerstone of the system is Banking Law No. 5411, which sets out the principles for establishing and operating banks, and aims to ensure confidence and stability in financial markets, the efficient functioning of the credit system and the protection of depositors’ rights.
This core banking regime is complemented by:
- Capital Markets Law No. 6362, governing public offerings, securities, investment services and capital market institutions.
- Law No. 6493 on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions, forming the backbone of the electronic payments and e-money framework.
- Law No. 6361 on Financial Leasing, Factoring and Financing Companies, and Law No. 5464 on Bank Cards and Credit Cards, governing specific segments of the financial sector.
Together, these laws create a multi-layered banking and finance regime that covers traditional banking, securities markets and the fast-growing fintech ecosystem.
2. Key Regulatory Authorities
2.1 Banking Regulation and Supervision Agency (BRSA)
The Banking Regulation and Supervision Agency (BRSA / BDDK) is the primary banking regulator. It is a public legal entity with administrative and financial autonomy, responsible for regulatory and consolidated supervisory oversight of the Turkish banking system.
The BRSA:
- Issues licences for banks and certain other financial institutions,
- Adopts secondary regulations and communiqués,
- Conducts prudential and conduct supervision, on-site and off-site,
- Imposes administrative sanctions and, in serious cases, triggers resolution actions.
2.2 Capital Markets Board (CMB) and Borsa İstanbul
The Capital Markets Board (CMB) administers the Capital Markets Law, issuing detailed secondary legislation on offerings, disclosure, corporate governance and market conduct.
Borsa İstanbul, Turkey’s consolidated securities and derivatives exchange, operates the organised markets for equities, debt instruments, derivatives and other capital markets products, under the oversight of the CMB.
2.3 Central Bank of the Republic of Türkiye (CBRT)
The Central Bank of the Republic of Türkiye (CBRT) is responsible for monetary policy, financial stability tools and, after amendments to Law No. 6493, the licensing and supervision of payment and electronic money institutions.
3. Core Legislation in Turkish Banking and Finance Law
3.1 Banking Law No. 5411
Banking Law No. 5411 regulates:
- Licensing and ownership (establishment of banks, share transfers, fit-and-proper tests),
- Corporate governance (board duties, internal systems, risk management),
- Prudential rules (capital adequacy, large exposures, liquidity and risk groups),
- Depositor protection and resolution, and
- Administrative and criminal sanctions for breaches.
Its main objectives are to ensure confidence and stability in financial markets, the efficient operation of the credit system, and the protection of depositors.
3.2 Capital Markets Law No. 6362
Capital Markets Law No. 6362 is a framework law aimed at aligning Turkish capital markets with EU standards. It:
- Governs public offerings, listing and trading of securities,
- Regulates investment firms, portfolio management companies and collective investment schemes,
- Imposes extensive disclosure and transparency obligations, including prospectus and ongoing reporting,
- Establishes rules on market abuse, insider dealing and manipulation, and
- Provides the CMB with broad investigatory and enforcement powers.
3.3 Law No. 6493: Payment Services and E-Money
Law No. 6493 regulates:
- Payment and securities settlement systems,
- Payment services and payment institutions,
- Electronic money institutions and electronic money issuance.
Its objective is to set out procedures and principles for payment systems and e-money, harmonising Turkish rules with EU payment services law (PSD-style).
The law grants the CBRT extensive regulatory, licensing, supervisory and enforcement powers over payment service providers and e-money institutions.
3.4 Other Sector-Specific Laws
- Law No. 6361 on Financial Leasing, Factoring and Financing Companies governs non-bank credit institutions, setting licensing, capital and conduct rules.
- Law No. 5464 on Bank Cards and Credit Cards provides the core legal framework for issuing and using card-based instruments.
4. Licensing and Market Entry
4.1 Banking Licences
To establish a bank or a branch of a foreign bank in Turkey, BRSA authorisation is mandatory. Law No. 5411 requires:
- Permission for establishment and operation,
- Minimum capital requirements,
- Fit-and-proper conditions for founders and qualifying shareholders,
- Incorporation as a joint-stock company, and
- Approval for significant share transfers and mergers.
Banks must also obtain certain CMB licences to conduct capital markets activities such as dealing in securities and derivatives.
4.2 Non-Bank Financial Institutions
Non-bank institutions (financial leasing, factoring, financing companies) require licences under Law No. 6361 and are subject to prudential and conduct supervision, typically by the BRSA.
Payment and electronic money institutions must obtain an operating licence from the CBRT under Law No. 6493 and meet specific capital, governance and IT requirements, including local data-keeping obligations.
5. Prudential and Conduct Regulation
5.1 Prudential Rules for Banks
Under the Banking Law and BRSA secondary regulations, Turkish banks must comply with:
- Capital adequacy rules aligned with Basel standards,
- Large exposure and related-party lending limits,
- Liquidity and FX position requirements,
- Internal systems covering risk management, internal control and internal audit,
- Consolidated supervision of banking groups.
The BRSA can require banks to take remedial actions, restrict activities, appoint board observers or management, and ultimately revoke licences in case of serious non-compliance.
5.2 Conduct and Consumer Protection
Conduct regulation is reflected across:
- Banking Law provisions on disclosure, fair treatment and complaint handling,
- Consumer protection rules for credit, deposits and payment services,
- Capital Markets Law obligations on fair dealing and conflict-of-interest management for intermediaries,
- Law No. 6493’s requirements on transparent fees, safeguarding of client funds and data protection for payment and e-money institutions.
6. Capital Markets and Securities Regulation
Turkish capital markets have undergone substantial reform under Law No. 6362, which:
- Modernised the public offering regime and prospectus rules,
- Enhanced corporate governance standards for listed companies,
- Strengthened the market abuse framework,
- Harmonised rules with EU capital markets to the extent possible.
Borsa İstanbul’s listing requirements and rulebooks operate alongside the Capital Markets Law, shaping the practical environment for IPOs, secondary offerings and ongoing obligations of issuers.
7. Fintech, Digital Banking and Payment Services
Turkey has a rapidly developing fintech and digital payments sector, legally anchored in Law No. 6493 and CBRT secondary legislation. The framework:
- Defines payment services, payment institutions and electronic money institutions,
- Requires licensing, capital and safeguarding of customer funds (e.g. segregated accounts and collateral),
- Introduces specific rules for anonymous prepaid instruments, digital wallets and open-banking-style access to payment accounts.
Recent regulatory updates aim to:
- Strengthen IT governance and information systems audits,
- Support interoperability and competition in payment services,
- Align with EU standards (PSD2-type concepts), while giving the CBRT robust enforcement powers, including administrative and, in some cases, criminal sanctions for non-compliance.
8. Enforcement, Dispute Resolution and Trends
8.1 Enforcement and Sanctions
The BRSA and CMB both possess strong enforcement toolkits:
- Administrative fines and corrective orders,
- Restrictions or suspensions of activities,
- Licence revocation and management changes,
- Referral of serious breaches to criminal prosecution under the Banking Law, Capital Markets Law or Law No. 6493.
Disputes may arise before:
- Civil courts (e.g. contractual and tort claims, investor and consumer lawsuits),
- Administrative courts (challenges to regulatory decisions),
- Criminal courts (market abuse, unauthorised banking, false disclosure).
Arbitration is common for cross-border finance transactions, but public-law and regulatory disputes remain within domestic courts.
8.2 Current and Emerging Trends
Key trends in Turkish banking and finance law include:
- Continued alignment with EU standards in capital markets and payments,
- Intensified focus on digitalisation, open banking and fintech licensing,
- Strengthened compliance expectations around AML/CFT, data protection and cyber-security,
- Ongoing refinements to financial restructuring and non-performing loan regimes via amendments to Banking Law No. 5411 and related measures.
9. Conclusion
Turkish banking and finance law combines a bank-centric regulatory core with a rapidly evolving framework for capital markets and digital financial services. For foreign and domestic market participants alike, success in Turkey depends on:
- Understanding the interaction between Banking Law No. 5411, Capital Markets Law No. 6362 and Law No. 6493,
- Navigating the distinct roles of the BRSA, CMB and CBRT,
- Building robust governance, risk and compliance systems that can withstand active regulatory scrutiny.
From traditional bank lending to sophisticated capital markets transactions and fintech innovation, Turkey offers significant opportunities—but only for institutions that treat regulatory compliance as a strategic priority, not a box-ticking exercise.
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