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- The Regulation on the activities of digital banks, which is a new business model in the finance and banking sector, has been regulated; and its purpose is to regulate the activities of branch-free banks that provide services through electronic banking services distribution channels and the provision of banking services as a service model to financial technology companies and other operations.
DIGITAL BANKS IN GENERAL
- The provisions regarding the establishment and operating permit conditions of digital banks in this Regulation are applied as additional provisions, without prejudice to the provisions contained in the RPRT.
- Unless otherwise stated, digital banks can perform all the activities that credit institutions can perform. Digital banks can only provide services through digital channels without branches.
- Loan customers of digital banks can only consist of financial consumers and SMEs.
- Digital banks cannot be organized under any name, such as correspondent, agency, representation, etc., other than the general directorate and service units affiliated to the general directorate; cannot open a physical branch; cannot make service units affiliated to the general directorate used as physical branches for any other purpose; and they cannot provide safe deposit boxes and custodial transactions and custody services, except for those that will be carried out in the digital environment. However, digital banks can create physical offices to handle customer complaints as long as they are not used as branches.
- The sum of unsecured cash consumer loans – excluding credit card expenditures, cash withdrawals, and overdraft accounts- that digital banks can make available to a customer cannot exceed four times the monthly average net income of the relevant customer, which is declared and confirmed by digital banks, and if the average monthly net income of the customer cannot be determined, it cannot exceed ten thousand TRY.
- Digital banks are required to establish a minimum of one physical office to handle customer complaints. They can set up ATMs themselves or serve their customers through other ATM networks.
- Digital banks can provide their customers with cash withdrawal or balance loading services to prepaid payment instruments through merchants who have agreed to accept the payment instruments they will issue.
- Digital banks should announce the committed continuity percentage values for the electronic banking services they offer on the home page of their websites. The committed continuity percentage for internet banking and mobile banking distribution channels of digital banks cannot be less than 99.8 percent.
- Digital banks are obliged to report the committed and realized MTBF, MTTR, and continuity percentage values on the basis of each distribution channel for the electronic banking services they offer, in accordance with the procedures and principles to be determined by the BRSA.
- In digital banks, the personnel specified as the highest level manager responsible for information systems must be appointed at least at the level of assistant general manager, and at least one of the board members of digital banks must have at least 10 years of professional experience in the field of information systems management.
OPERATING PERMIT AND CAPITAL AMOUNT IN DIGITAL BANKS
- In accordance with the RPRT, Art. 4/1-a-p, the activity schedule, and business plan documents should be submitted to the BRSA. There are also documents that need to be submitted in addition to the business plan and activity schedule documents.
- The operating permit is granted as a result of the evaluation to be made pursuant to RPRT Art. 7/7. In this context, the service unit responsible for on-site inspection may request the applicant to have an independent audit report prepared by one of the independent audit firms if it is deemed necessary.
- Other banks, which have obtained an operating permit other than digital banks and are able to provide services through their physical branches within the framework of their current operating permits, do not need to make a separate application if they desire to offer services through electronic banking channels. The provisions of this Regulation regarding digital banks do not apply to such banks. In this context, these banks can only close their branches in accordance with a plan deemed appropriate by the Agency.
- The minimum capital required for digital banks to obtain an operating license is 1 billion TRY. BRSA is authorized to increase this amount.
- If the digital bank increases the minimum paid-in capital required for the operating permit to two billion five hundred million Turkish Liras, upon the application of the digital bank, the BRSA may decide to lift the operating restrictions for these banks completely or gradually within the framework of a transition plan it deems appropriate. If the activity restriction is completely lifted, the digital bank can perform all the banking activities that other credit institutions can do.
SERVICE BANK AND INTERFACE PROVIDERS
- The service bank may only provide service model banking services to local resident interface providers and only within the framework of its own operating permits. Banks cannot be interface providers.
- The service bank will decide whether or not to provide banking services to the customer through service model banking via the interface provider’s interface, including the loan allocation decision, and the banking services to be provided to the customer will be carried out on the balance sheet of the service bank.
- In order for the interface provider of the service bank to provide banking services to its customer, a contractual relationship must be established between the said customer and the service bank pursuant to Article 76 of the Banks Law.
- The interface provider, in addition to receiving services from the service bank, is a support service organization that provides services to the service bank. Providing support services to a service bank as an interface provider is subject to the approval of the BRSA.
- The service bank is obliged to provide information within the scope of its service, showing the list of all interface providers it serves and which banking services it uses, and to send every service contract it has executed with interface providers to the BRSA.
- This Regulation determines the provisions that the service bank should include in the service contract with an interface provider in order for the bank to provide service to an interface provider.
- If the interface provider provides the banking services of the service bank to its customers additionally through the interface, it has developed, and in this context, if it is determined that it has used all kinds of fees, expenses, and benefits that it may demand from the customers in return for the service fee paid to the service bank, or if it is detected that the support services offered to the service bank by the interface provider don’t comply with the provisions of the legislation, BRSA may cancel the permission given to the interface provider.