Turkey To Boost Islamic Finance With Advanced Customer Protection

Two new regulations¹ were published in the Official Gazette on 30 November 2021, with certain provisions entering into force on 01 January 2022.

Both the Amendment and the Communique offer a more in-depth regulation for Islamic Finance departments of Turkish banks. Additionally, both introduce some major changes to the transparency requirements of banks, with the aim of achieving better customer protection.

The Amendment sets forth more rigid rules on potential members of the advisory committees of banks, precluding them from adopting a role in the committee if, inter alia, they have participated in the operational and executory departments within the past year - thus aiming to minimise any potential conflict of interest. Moreover, it is now compulsory for the chairman of the advisory committee to reside in Turkey.