STATUTE

Official Gazette

Date : 28/02/2006

Issue: 26094

COUNCIL OF MINISTERS DECISION

Decision No: 2006/10018

The entry into force of the attached "Statute of the Participation Banks Association of Turkiye" was decided by the Council of Ministers on 3/2/2006 pursuant to Article 81 of the Banking Law No. 5411, upon the letter of the Minister of State and Deputy Prime Minister dated 23/1/2006 and numbered 110 based on the proposal of the Banking Regulation and Supervision Agency.

Recep Tayyip ERDOĞAN

Prime Minister A.GÜL

Minister of Foreign Affairs and Deputy Prime Minister A ŞENER

Minister of State and Deputy Prime Minister M. A. ŞAHİN

Minister of State and Deputy Prime Minister B. ATALAY

Minister of State A. BABACAN

Minister of State M. AYDIN

Minister of State N. ÇUBUKÇU

Minister of State K. TÜZMEN

Minister of State C. ÇİÇEK

Minister of Justice A. AKSU

Minister of National Defense V A.AKSU

Minister of Interior K.UNAKITAN

Minister of Finance H.ÇELİK

Minister of National Education F. N. ÖZAK

Minister of Public Works and Settlement R.AKDAĞ

Minister of Health M. H. GÜLER

Minister of Transportation M. M. EKER

Minister of Agriculture and Rural Affairs M. BAŞESGİOĞLU

Labor and Social. Minister of Labor and Social Security A. COŞKUN

Minister of Industry and Trade M.H.GÜLER

Minister of Energy and Natural Resources A. KOÇ

Minister of Culture and Tourism O. PEPE

Minister of Environment and Forestry

STATUTE OF THE ASSOCIATION OF PARTICIPATION BANKS OF TURKIYE

PART ONE

General Provisions, Duties and Authorities

Organization

ARTICLE 1 - Participation Banks Association of Turkiye is a professional organization with legal personality and public institution status established in accordance with the Banking Law. Its head office is Istanbul and it may establish the necessary organizations in the country.

Definitions

ARTICLE 2 - In the application of this Statute;

Union Participation Banks Association of Turkiye,

Law Banking Law No. 5411,

Participation Bank: According to the Banking Law No. 5411, banks established in Turkiye under the name of participation bank and branches in Turkiye of such institutions established abroad,

Agency: Banking Regulation and Supervision Agency,

Board: Banking Regulation and Supervision Agency,

Fund Savings Deposit Insurance Fund

refers to.

Membership in the Union

ARTICLE 3 - All participation banks operating in Turkiye are obliged to become a member of the Association, comply with the provisions of this Statute and implement the decisions taken by the authorized bodies of the Association within one month from the date they obtain an operating license in accordance with the provisions of the Law.

The membership records of participation banks whose operating license has been revoked under any circumstances, or which have merged with one or more other participation banks, or which have transferred all their assets and liabilities and other rights and obligations to another participation bank operating in Turkiye, or which have decided to liquidate, shall be deleted.

Purpose, powers and duties of the Union

ARTICLE 4 - The purpose of the Association is to defend the rights and interests of participation banks within the framework of the principles of free market economy and full competition, in line with the principles and rules of banking regulation, to carry out activities for the growth and healthy operation of the banking system and the development of the banking profession, to increase competitiveness, to take/ensure that the necessary decisions are taken, to implement and to demand their implementation in order to create a competitive environment and to prevent unfair competition.

In order to realize this objective, the Association carries out the following tasks:

a) To monitor the legislation on banking and participation banks and to announce the regulations on these issues to member participation banks,

b) To ensure that the members work in accordance with the needs of the economy within the dignity and discipline required by the union and the profession by determining the principles of the profession,

c) To determine the professional principles and standards to be complied with by the members of the member participation banks by taking the appropriate opinion of the Agency,

d) To follow up the implementation of the decisions taken pursuant to the relevant legislation and the measures requested to be taken by the Agency,

e) To take and implement all necessary measures to prevent unfair competition among its members,

f) To take decisions to strengthen professional solidarity in relations between participation banks,

g) To ensure cooperation between participation banks on joint projects in cooperation with the Agency,

h) To determine the principles and conditions to be complied with by the members in their announcements and advertisements in terms of type, form, quality and quantity by taking the appropriate opinion of the Authority,

i) To represent participation banking in Turkiye and abroad, to promote participation banking and to work to enlighten the public on this issue,

j) Organizing seminars, symposiums, conferences and training programs on banking,

k) To determine the procedures and principles regarding the form and content of the agreements stipulated in the provisions on customer rights and the transactions to which type agreements will be applied, by obtaining the appropriate opinion of the Board,

l) Establishing an arbitral tribunal within the scope of the procedures and principles prepared by the Association and approved by the Board in order to ensure the evaluation and settlement of disputes between the members and their individual customers,

m) Providing consultative opinions to official authorities and organizations on participation banks and banking issues,

n) To monitor domestic and international developments in the economy, financial sector and banking system and to convey the information it will gather to its members and those concerned,

o) To carry out the necessary studies for the promotion of national savings and to make recommendations to the competent authorities,

p) To collect and publicize non-confidential statistical information on participation banks,

r) Without prejudice to the provisions of the relevant legislation, to take advisory decisions for member participation banks regarding the commissions, fees and expenses that participation banks will collect in return for the services they offer to customers, the profit share rates, commissions and fees they will apply for the loans they open and other transactions related to them, and the determination of the profit and loss participation rate in participation accounts,

s) To file lawsuits and/or take necessary initiatives based on the decision of the Board of Directors on matters concerning the common interests of its members,

t) To take the measures requested to be taken by the Institution,

u) To follow up the implementation of the decisions and measures taken by the Association and to impose the necessary sanctions on members who do not comply with them in a timely and complete manner,

v) To perform other duties imposed on him/her by law and relevant legislation.

Representation of participation banks

ARTICLE 5 - Participation banks shall be represented in the Association by the chairman of the board of directors, managing director, general manager or one of the deputy general managers. In the event that these cannot attend due to excuses, a deputy general manager may be authorized to represent. However, the duties of the Chairman of the Board of Directors and Deputy Chairman of the Board of Directors of the Association shall be carried out by the general managers elected by the Board of Directors.

PART TWO

Organs, Units Duties and Authorities

Organs of the Union

ARTICLE 6 - The organs of the Association shall consist of the General Assembly, the Board of Directors and the Auditors. The decision-making body of the Union is the General Assembly and the executive body is the Board of Directors. The Union also has a General Secretariat unit.

General Assembly and its duties

ARTICLE 7 - The General Assembly of the Association consists of representatives of participation banks.

The General Assembly shall perform the following duties:

a) To examine and approve the reports of the Board of Directors and Auditors on the annual activities and accounts of the Association and the budget,

b) To elect the members of the Board of Directors,

c) To elect the auditors,

d) To discuss the proposals and wishes to be made by the Board of Directors on issues related to the duties and objectives of the Association or to be submitted to the General Assembly by the members until the end of March each year, to take the necessary decisions, to make decisions about the new working year,

e) To make recommendations to the Agency on the amendments to be made in the Statute.

Procedure for convening the General Assembly

ARTICLE 8 - The General Assembly shall hold its ordinary and extraordinary meetings at the Union Headquarters or at another place to be decided by the Board of Directors. The ordinary meeting shall be held in May every year. The Board of Directors shall decide on the place, day, hour and agenda of this meeting and the matters related to the meeting to be held in the absence of majority. However, the period between the first meeting and the second meeting cannot be determined as less than one week. This decision of the Board of Directors shall be notified by the General Secretariat to the members and the Institution at least fifteen days prior to the date of the first meeting by registered letter with return receipt requested or by special courier. At least fifteen days before the general assembly meeting where elections will be held, the list determining the member participation banks and their representatives who will participate in the elections, together with a letter stating the matters included in the decision of the Board of Directors regarding the meeting, shall be submitted in triplicate to the presiding judge of the election board to be determined by the Supreme Election Board. The judge shall make the necessary examination and approve the list and other matters; appoint a chairman of the ballot box committee and two members of the ballot box committee and one substitute member for each of them.

An extraordinary meeting shall be held upon the call of the Board of Directors or the written application of one fourth of the members or upon the necessity to be seen by the auditors. This meeting shall also be notified to the Institution, the members and, if organ elections are to be held, to the judge presiding over the election board at least fifteen days in advance in the manner specified in the paragraph above.

At extraordinary general assembly meetings where elections are held, the judge presiding over the district election board shall appoint a chairman of the ballot committee and two members of the ballot committee and one substitute member for each of them.

Meeting and decision quorum

ARTICLE 9 - The meeting quorum of the General Assembly is one more than half of the number of participation bank members. If the quorum is not met in the first meeting, the General Assembly is authorized to convene and take decisions without seeking any quorum in the second meeting.

Only the items placed on the agenda shall be discussed at the General Assembly. However, items proposed by any of the members and requested to be discussed by the majority of the members present at the meeting must be included in the agenda. Decisions are taken by majority of votes. In case of equality, the vote of the chairman of the Council shall be preferred.

The decisions taken by the General Assembly are also valid for the members who are not present at the meeting.

Presidium at the General Assembly

ARTICLE 10 - The General Assembly shall be chaired by the Chairman of the Board of Directors, or in his absence, by the Deputy Chairman of the Board of Directors, and a deputy chairman and two clerks shall be elected from among the members present. Minutes of discussions and resolutions shall be signed and kept by the chairman, deputy chairman and clerks.

Voting rights, how votes are cast and notification of decisions

ARTICLE 11 - Each member has one vote in the General Assembly.

Voting in elections shall be conducted according to the principles of secret ballot and open classification. At the end of the election period, the results of the elections shall be recorded in a report and signed by the chairman and members of the ballot box committee. Any objections to be made to the elections within two days from the issuance of the minutes shall be examined and finalized by the judge on the same day.

Voting is open at the General Assembly. Only in elections and in matters decided by the General Assembly, secret ballot shall be used. If the General Assembly so decides, the election of the deputy chairman and clerks shall be held by open ballot.

A copy of the decisions shall be sent to the members and the Institution by registered letter with return receipt or by special courier.

Composition and meeting principles of the Board of Directors

ARTICLE 12 - The Board of Directors is composed of representatives of participation banks in operation.

Members of the Board of Directors are elected for two years. Members whose term expires may be re-elected. The members of the Board of Directors shall not receive any remuneration for their duties.

The Chairman of the Board of Directors represents the Association and is responsible for the implementation of the decisions of the General Assembly and the decisions of the Board of Directors.

The Board of Directors elects a Chairman and a Deputy Chairman from among its members to serve for two years. In the event of a vacancy in the Chairmanship of the Board of Directors for any reason, the Deputy Chairman shall assume the Chairmanship until the next General Assembly.

The Board of Directors shall convene upon the call of the General Secretary with the approval of the President or, in his/her absence, with the approval of the Vice President, as the affairs of the Union may require. Any member may request the President in writing to call the Board of Directors for a meeting. The Board of Directors shall convene at least once a month. The Board of Directors shall convene at the headquarters of the Union or elsewhere. The agenda of the meeting shall be sent to the members and auditors by the Secretary General. The Board of Directors convenes with the majority of its members. Decisions are taken by the majority of those present at the meeting. In case of equality, the vote of the party attended by the Chairman shall be preferred.

Members of the Board of Directors may not participate in meetings where decisions of a special nature related to them are to be taken.

Duties of the Board of Directors

ARTICLE 13 - The duties of the Board of Directors, which is the executive body of the Association, are as follows.

a) To perform the duties specified in this Statute,

b) To determine those authorized to bind the Union and to decide on their signature powers,

c) To appoint the Secretary General and determine his/her remuneration,

d) To determine the procedures and principles to ensure the evaluation and settlement of disputes between the members and their individual customers and to establish an arbitral tribunal within these procedures and principles approved by the Board,

e) To call the General Assembly for ordinary and extraordinary meetings, to determine the agenda, place, day and time of the General Assembly meetings to be held,

f) To approve the internal regulations of the Union,

g) Appointing the Union staff and determining the wage policy,

h) To decide on the purchase, sale or lease of real estate in order for the Association to realize its objectives

i) Taking disciplinary decisions,

j) To establish the organization of the Union,

k) To determine the periodic reports and information to be submitted to the Union by the members,

l) To prepare the Union budget and the annual activity reports of the Union and submit them to the General Assembly,

m) To perform other duties determined by laws and relevant legislation.

Taking a disciplinary decision

ARTICLE 14 - The Board of Directors shall ask for the written defense of the member who fails to comply with the provisions of the Law on Establishment Associations, the regulations in the Statute of the Association, and the decisions and measures taken by the Association. Whether or not a disciplinary decision shall be taken shall be decided after the defense of the member is received. In the event that the defense is not given within one month from the date of notification of the letter requesting defense, the member is deemed to have waived the right to defense. The Board of Directors must finalize disciplinary matters within two months from the date of the defense request letter. This period may be extended for a maximum of one month. The relevant member or members cannot attend the meetings where disciplinary decisions will be taken.

The disciplinary decisions to be taken by the Board of Directors are written warnings and/or administrative fines in cases stipulated in Article 81 of the Law.

Disciplinary decisions are notified to the Agency and decisions involving administrative fines are also notified to the Fund for revenue recording.

Secretary General, his appointment, duties and powers

ARTICLE 15 - The Secretary General shall be appointed by the Board of Directors. The Secretary General must have at least a bachelor's degree in law, economics, finance, banking, business administration, public administration and equivalent disciplines, and those who have a bachelor's degree in engineering must have a master's degree in the mentioned fields and at least ten years of professional experience in banking or business administration.

The duties and powers of the Secretary General are as follows;

a) To ensure that the decisions of the General Assembly and the Board of Directors are announced to the members and to monitor their implementation,

b) To fulfill the duties assigned by the Board of Directors,

c) To prepare the staff, organizational structure, wage policy, budget, regulations and reports on the activities of the Association and submit them to the Board of Directors for review and approval,

d) To carry out all correspondence with the Union's accounting and ledger and other books,

e) To represent the Association before the official authorities, before the courts and against third parties in the name of the Board of Directors,

f) Preparing the opinions and information requested from the Association pursuant to the Banking Law and submitting them to the Board of Directors for approval.

Election, duties and powers of auditors

ARTICLE 16 - The General Assembly elects two persons authorized as certified public accountants in accordance with Law No. 3568 as auditors to serve for a period of two years.

Auditors are elected by secret ballot. Auditors whose terms have expired may be re-elected. The remuneration to be paid to the auditors for their services shall be determined by the General Assembly.

If an auditor position becomes vacant during the year for any reason whatsoever, a new auditor shall be elected at the following general assembly meeting. However, if two auditor positions become vacant, new auditors shall be elected at the extraordinary general assembly meeting to be held upon the call of the Board of Directors.

The auditors shall examine all accounts and transactions of the Association and submit their conclusions on the work of the Association in a report to the annual meetings of the General Assembly.

The auditors may, if they wish, attend the meetings of the Board of Directors, provided that they do not participate in the voting process, and may have the matters they deem necessary added to the agenda of the Board of Directors.

PART THREE

Other Provisions

Financial provisions

ARTICLE 17 - The fiscal year of the Association is the 12-month period starting on July 1.

The expenses included in the budget adopted by the General Assembly shall be divided among the members in proportion to their voting rights as determined in accordance with Article 11 of these Statutes.

Each member is obliged to deposit his/her share of the expenses in an account to be opened at the Central Bank until the end of June. Contribution shares not deposited by the members within the due period shall be collected by the Association through execution. The decisions of the Board of Directors of the Association regarding the cost participation shares are official documents as stipulated in Article 68 of the Execution and Bankruptcy Law No. 2004.

In the event of termination of the membership of the Association for any reason whatsoever, the cost participation shares collected in advance shall not be refunded. The Board of Directors is authorized to collect the participation share that cannot be collected due to the termination of the membership of the Association for any reason from the members within the framework of the provisions of the third paragraph.

Income of the Union

ARTICLE 18 - The revenues of the Association shall be derived from the following sources:

a) Expense participation shares calculated in proportion to the number of votes determined in accordance with Article 11 of this Statute based on Article 81 of the Law,

b) Entrance fee to be paid by participation banks for one time and the amount to be determined by the Board of Directors,

c) Revenue surpluses carried over from the previous year,

d) All kinds of donations,

e) Other income.

Registration procedure of the Union

ARTICLE 19 - Journal, general ledger, member registration book and other books deemed necessary shall be kept by the Association. Minutes and resolutions of the General Assembly and the Board of Directors and signed copies of outgoing correspondence documents shall be kept in separate folders in order of date and number.

Audit

ARTICLE 20 - The accounts and records of the Association shall be audited by independent audit institutions and the audit results shall be submitted to the Agency at the end of March of each year.

Removed provisions

ARTICLE 21 - The Resolution of the Council of Ministers dated 04/10/2001 and numbered 2001/3138 on the entry into force of the Statute of the Association of Private Finance Institutions is hereby repealed.

PROVISIONAL ARTICLE 1 - The duties of the Chairman and members of the Board of Directors and auditors existing at the date of entry into force of this Statute shall continue until the first elective general assembly meeting to be held.

Enforcement

ARTICLE 22 - This Statute enters into force on the date of its publication.

Execution

ARTICLE 23 - The provisions of this Statute shall be executed by the Minister to whom the Banking Regulation and Supervision Agency is related.

DUTIES

(related article of the Banking Law No. 5411)

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Duties and powers of the troops

Article 80 - Associations of organizations;

a) To ensure the development of Jul,

b) To ensure that the members work in accordance with the needs of the economy in the dignity and discipline required by the union and the profession by determining the professional principles,

c) To determine the professional principles and standards to be followed by the members of the member bank by taking the appropriate opinion of the Institution,

d) To follow up the implementation of the decisions taken in accordance with the relevant legislation and the measures requested to be taken by the Institution,

e) To take and implement all necessary measures in order to prevent unfair competition between its members Dec,

f) To determine the principles and conditions that members will comply with in their advertisements and advertisements by taking the appropriate opinion of the Institution in terms of type, form, quality and quantity,

g Dec j) To ensure cooperation between banks on joint projects by cooperating with the institution j) To ensure cooperation between banks on joint projects j) To ensure cooperation between banks Jul,

h) To file a lawsuit in accordance with the decision of the board of directors on issues related to the common interests of its members,

i) To determine the procedures and principles regarding the forms and contents of the contracts stipulated in the provisions on customer rights,

Jul Decrees and is authorized to form an arbitration committee in accordance with the procedures and principles they will prepare and approved by the Board to ensure the evaluation and settlement of disputes between members and their individual customers, without prejudice to the provisions of the Law No. 4077 on Consumer Protection and the rights of application recognized by other laws.

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(relevant article of the TKBB Statute dated 28/02/2006)

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