Status

MINISTERIAL DECREE

Decree No: 2006/ 10018
The enclosed enforcement of 'The Statute of Turkish Participation Banks' Association' was resolved by the Council of Ministers on 03/02/2006 upon the official letter dated 23/01/2006 and no. 110 of the Offices of Minister of State and Deputy Prime Minister based upon the proposal of BRSA (Banking Regulation and Supervision Agency), as per article-81 of the Banking Law no. 5411.

Ahmet Necdet SEZER
PRESIDENT

Recep Tayyip ERDOĞAN
Prime Minister

A.GÜL
Min. of For. Aff. & Dp. Pr. Min.

A ŞENER
Min. of State & Dp. Pr. Min

M. A. ŞAHİN
Min. of State & Dp. Pr. Min

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 Defense

A.AKSU
Minister of Internal Affairs

K.UNAKITAN
Minister of Finance


H.ÇELİK
Minister of Education

F. N. ÖZAK
Min. of Pub. Works & Housing

R.AKDAĞ
Minister of Health

M. H. GÜLER
Minister of Transport.


M. M. EKER
Min. of Agr. & Rur. Aff.

M. BAŞESGİOĞLU
Minister of Labor & Social Security

A. COŞKUN
Minister of Industry & Trade


M.H.GÜLER
Min. of Energy & Nat. Sources

A. KOÇ
Minister of Culture & Tourism

O. PEPE
Minister of Environment & Forests



THE STATUTE OF TURKISH PARTICIPATION BANKS' ASSOCIATION

PART ONE
General Provisions, Tasks and Authorities

Foundation:
ARTICLE 1- The Association of Turkish Participation Banks is a professional public institution with legal personality that has been established as per the Banks Law. The Head Office being located in Istanbul, it is authorized to establish required organization in Turkey.

Definitions:
ARTICLE 2 - In the application of this very Statute:
Association stands for : Turkish Participation Banks' Association,
Law for : The Banking Law no. 5411,
Participation Bank for: The banks that has been founded in Turkey under the title of Participation Banks according to the Banking Law no. 5411, as well as the branches in Turkey of similar institutions abroad,
Agency : Banking Regulation and Supervision Agency,
Board : Banking Regulation and Supervision Board,
Fund : The Insurance Fund for Savings Deposits,

Membership with the Association:
ARTICLE 3
- According to the provisions of the Law, all the Participation Banks operating in Turkey are to register as a member of the Association within a month following the receipt of the certificate for operation, whereby following the provisions of this Statute and applying the decrees adopted by the authorized bodies of this Association.
No matter in whatsoever manner, the membership registration of such a participation bank as whose operation certificate has been cancelled, or as has merged with another or other several Participation Banks or as has transferred all its assets and liabilities along with its other rights and obligations to another Participation Bank operating in Turkey or as has resolved for liquidation is cancelled.

Objectives, Authorities and Tasks of Association:
ARTICLE 4
- The aim of the Association is to defend the rights and interests of Participation Banks within the frame of the principles of free market economy and full competition in direction of the principles and rules of the regulation of banking; to carry out studies and researches for the enhancement and healthy functioning of banking system, for the development of banking, for the improvement of competitive power; to adopt/ to have adopted, practice and demand to be practiced such resolutions as are required to introduce a competitive environment and avoid unjust competition.
For the realization of these very objectives the Association carries out the following tasks:

a) To follow up regulations related to Banking and Participation Banks, whereby informing the Member Participation Banks thereof;

b) To ensure that Members carry out their studies in unison, dignity and discipline required by the profession by determining the principles of the profession in conformity to the requirements of economy;

c) To determine the professional principles and standards to be followed by Members of Participation Banks by also asking for the Agency's proper views;

d) To follow up the implementation of resolutions that have been adopted as per the related regulations and measures demanded by the Agency;

e) To take and apply all kinds of necessary measures to avoid unjust competition between Members thereof;

f) To adopt such resolutions as shall strengthen the professional solidarity in relationships among Participation Banks;

g) To ensure coordination in common projects among Participation Banks in coordination with the Agency;

h) To determine - also by asking for proper views of the Agency - the principles and provisions that Participation Banks shall abide by in their notices and advertisements in consideration of their type, form, quality and quantity;

i) To represent Participation Banking both home and abroad, to publicize Participation Banking and to carry out tasks to enlighten the public in this respect;

j) To organize seminars, symposia, conferences and training programs on Participation Banking;

k) To determine - by asking for the Board's proper opinions thereon - the manners and principles as regards with the form and contents of agreements stipulated by the provisions concerning customers' rights as well as those transactions whereto this type of agreements shall be applied;

l) To form a Board of Arbitration within the manners and principles that have been prepared by the Association and endorsed by the Board with a view to evaluating and solving conflicts between Members and their individual clients;

m) To submit advisory opinions to governmental offices and institutions on Participation Banks and Participation Banking;

n) To follow progressions in economies, finance sectors and banking system home and abroad, conveying thereby the collected data to its Members and the concerned people;

o) To carry out such studies and researches in order to encourage national savings, thereby submitting proposals to authorized offices:

p) To collect and publicize unclassified statistical data on Participation Banks;

r) On condition that the provisions of related provisions should remain valid, to take advisory resolutions about Member Participation Banks as regards to the determination of the commission fee, charges and expenses the Participation Banks shall receive from clients in return for services they offer, the rates of profit-share, commission fee and charges they shall apply in the credits they have opened and other transactions related thereto as well as the rate of participation in profit and loss in Participation Accounts;

s) On such issues as concern the common interests of its Members, to file court cases based upon Board resolution thereon, and/or to fulfill necessary procedures;

t) To take such measures as are required by the Agency;

u) To follow up the implementation of the Association's resolutions and measures, carrying out due sanctions as regards to those Members that fail to follow these timely and thoroughly;

v) To carry out other tasks charged by Laws and related regulations thereon.

Representation of Participation Banks:
ARTICLE 5
- Participation Banks are represented at the Association by either Chairman, or Board Members, or General Manager, or Deputy General Manager. In case of absence of all of these because of an excuse, an Assistant General Manager may be granted the authority to represent its Participation Bank. However, the positions of Chairman and Deputy Chairman of the Association are carried out by those General Managers that have been appointed to this position by Board of Directors.

PART TWO
Organs, Departments and Their Tasks and Powers


Organs of Association:
ARTICLE 6
- The Organs of Association are composed of General Assembly, Board of Directors and Auditors. The Association's organ of decision is General Assembly and the organ of execution is Board of Directors. Also, there is the department of Secretariat General.

General Assembly and its Tasks:
ARTICLE 7
- The Association's General Assembly is made up of the representatives of Participation Banks.

General Assembly carries out the following tasks:
a) To examine and endorse the reports of Board of Directors and Auditors as to the Association's annual activities and accounts as well as the budget thereof;

b) To elect Board Members;

c) To elect Auditors;

d) To discuss proposals and wishes that have been conveyed by Board of Directors on issues concerning the tasks and objectives of the Association or that have been put forth to Board of Directors by Members by the end of March every year to be submitted to General Assembly, adopting decisions required thereon and adopting resolutions as to the new working calendar;

e) To submit proposals to the Board as to any amendments to be required in the Statute;

Manner of Meeting of General Assembly:
ARTICLE 8
- General Assembly holds its ordinary and extraordinary meetings at the head-office of the Association or elsewhere to be determined by Board of Directors. The ordinary meeting is held every year in May. Board of Directors fixes the place, date, hour, agenda and - if the majority is not ensured - the issues concerning the meeting to be held. Nevertheless, the period of time between the date of the former and latter meetings may not be shorter than a week. This resolution of the Board of Directors is conveyed by Secretary General to Members and the Board at least fifteen days earlier than the date of the first meeting by certified mail or through courier. At least fifteen days before those General Assembly Meetings where elections shall be held, the list wherein the Member Participation Banks that shall take place in elections as well as their representatives are mentioned, along with the letter that includes the issues mentioned in Board of Director's resolution concerning the meeting, shall have been submitted in three copies to the Judge that is the President of the Board of Elections, who shall be appointed by Higher Board of Elections. Having fulfilled due examination thereon, the Judge endorses the list and other issues, and appoints a Presiding Official for the Board of Election and two Members of Board of Election and Deputy Members for each thereof.
An Extraordinary Meeting is held upon the call of Board of Directors or upon the written application of one-fourth of its Members or as and when so deemed necessary by Auditors. This meeting shall also, in the same manner as has been mentioned in the above-said provision, have been conveyed first to the Agency, Members, and - if any election for organs shall be held - to the Judge who is the President of the Board of Elections at least fifteen days prior to the Meeting.
At those Extraordinary General Assembly Meetings where an election is held, Presiding Official of the Board of Election and two Members of Board of Election and Deputy Members for each thereof are appointed by the Judge who is the President of the Town's Board of Elections.

Quorum for Meetings and Resolutions:
ARTICLE 9
- The Quorum for a General Assembly Meeting is one plus half the number of Member Participation Banks. If the quorum cannot be reached at the first meeting, the General Assembly is authorized to hold its second meeting and adopt resolutions without requirement for any proportion.
Only the agenda items are discussed at a General Assembly Meeting. Nevertheless, it is compulsory that such issues as are proposed by any one of Members and are deemed appropriate to be discussed by the majority of Members that are present at the meeting be included in the Agenda. Resolutions are adopted by the majority of votes. In case of equal votes, the opinion of that party wherein President of Presiding Council is found is preferred.
The resolutions that are adopted by the General Assembly are also valid for those Members that are absent at the meeting thereof.

Presiding Council at General Assembly Meeting:
ARTICLE 10
- A General Assembly Meeting is presided by Chairman and in case of his absence Deputy Chairman. Besides, a Deputy President and two secretaries are elected from among the current Members. Minutes and resolutions of meetings are undersigned by President, Deputy President and Secretaries, and thus filed.

Right of Vote, Manner of Voting and Notification of Resolutions:
ARTICLE 11
- Each Member has the right for one vote at General Assembly Meeting.
Voting at elections is realized by secret voting and open classification. The results of voting that are recorded at the end of the period of an election with an official report are undersigned by the Head and Members of Board of Election. Any objections to the elections to be placed within two days after the preparation of Minutes are examined by Judge on the very same day and resolved upon definitively.
Voting is open at a General Assembly Meeting. However, at elections and in the discussion of such issues as resolution is adopted by General Assembly thereupon secret voting is resorted to. If it is so resolved by General Assembly, the election of Deputy Chairman and Secretaries is done by open voting.
A copy of resolutions is dispatched to Members and Agency by certified mail or through a courier.

Formation and Meeting Principles of Board of Directors:
ARTICLE 12
- Board of Directors is made up of the representatives of the Participation Banks.
Board Members are elected for a period of two years. Those Board Members whose terms of office have expired may be re-elected. Board Members are not paid for this position of theirs.
Chairman represents the Association and is responsible for the execution of the resolutions of the General Assembly and the Board of Directors.
The Board of Directors elects from among its members a Chairman and a Deputy Chairman for a period of two years. If the post of Chairman becomes vacant for any reason, Deputy Chairman undertakes this office until the forthcoming General Assembly Meeting.
The Board of Directors convenes upon the call of Secretary General with the approval of Chairman or, in case of his absence, Deputy Chairman as and when so required for the Association's affairs. Each Member may demand Chairman that he summon the Board of Directors for a meeting. Board of Directors is to meet at least once a month. Board of Directors convenes at the Head Office or at elsewhere. Board Members and Auditors are informed of the agenda of meeting by Secretary General. Board of Directors convenes with the majority of its quorum. Resolutions are adopted by the majority of those members that attend the meeting. In case of equal votes, the opinion of that party wherein Chairman is found is preferred.
Board Members are not allowed to attend such meetings as where a private resolution/ resolutions shall be adopted about them.

The Tasks of the Board of Directors:
ARTICLE 13
- The tasks of the Board of Directors, which is the executive body of the Association, are as follows:
a) To carry out the tasks mentioned in this very Statute;

b) To determine those people who are authorized to oblige the Association and to resolve their signature authorities;

c) To appoint Secretary General and to fix his salary;

d) To determine the manners and principles for the evaluation and solution of conflicts between members and their individual clients and to form a Board of Arbitration within the frame of these manners and principles endorsed by the Board;

e) To summon the General Assembly to ordinary and extraordinary meetings, to fix the agenda, place, date and hour of General Assembly Meetings;

f) To endorse the internal regulations of the Association;

g) To appoint the staff of the Association and fix their salaries;

h) To adopt resolutions for the purchase, sale and rental of real estate so that the Association can realize its aims and objectives;

i) To adopt disciplinary resolutions;

j) To form the Organizational Structure of the Association;

k) To determine such periodical reports and information as will be submitted to the Association by the Members;

l) To prepare the Association's budget and annual reports with a view to submitting them to the General Assembly;

m) To carry out other tasks determined by Laws and the related Regulations.

Adopting Disciplinary Resolutions:
ARTICLE 14
- The Board of Directors demands written defense from those Members that violate the Law's decrees as regards to Associations, the regulations in the Association's Statute, the decrees and measures adopted by the Association. Whether any disciplinary resolutions shall be adopted is decided after the receipt of the Member's defense. If no defense has been given within a month following the delivery of the notice for a defense, it is assumed that the concerned Member has relinquished the right of defense. The Board of Directors is to finalize disciplinary issues within two months following the notice for a defense, which could be extended maximum for a month.
The concerned Member or Members are not allowed to attend those meetings where disciplinary resolutions shall be adopted.
The disciplinary resolutions to be adopted by the Board of Directors are written warning and/or pecuniary penalties in such cases as are stipulated in Article 81 of the Law.
Adopted disciplinary resolutions are informed to the Agency and resolutions including administrative pecuniary penalties are informed to the Fund so that they can be entered as revenues.

Appointment, Tasks and Powers of Secretary General:
ARTICLE 15
- Secretary General is appointed by the Board of Directors. Secretary General is to have at least Bachelor's Degree in law, economics, finance, banking, management, public administration or similar branches of sciences; one who has received degree in engineering is to have done post-graduate study in one of the aforementioned branches and have at least ten years' professional experience in banking or management.

The tasks and powers of Secretary General are as follows:
a) To ensure the announcement of the resolutions of General Assembly Meetings and Board Meetings to the Members and to follow up the implementation thereof;

b) To carry out those tasks charged by the Board of Directors;

c) To prepare the staff, organizational structure, salary politics, budget, regulations and activity-reports of the Association and to submit them to the scrutiny and approval of the Board of Directors;

d) To carry out the accountancy of the Association, also keeping the books thereof; yet to keep other books and carry out all kinds of correspondence;

e) To represent the Association at all government offices and before courts; and yet to represent it in relation to Board of Directors towards third parties;

f) As per Banking Law, to prepare such views and information as are demanded from the Association and to submit such to the approval of the Board of Directors.

Election, Tasks and Powers of Auditors:
ARTICLE 16
- The General Assembly elects two persons as Auditors to officiate for two years, who hold Chartered Accountancy Certificate as per Law no. 3568.
Auditors are elected by secret ballot. The Auditors whose terms of office terminate may be reelected. The fee to be paid to the Auditors for their service is determined by the General Assembly.
If the position of any Auditor becomes vacant within the year for any reason, the new Auditor is elected at the forthcoming General Assembly Meeting. Nevertheless, in case of becoming vacant of both the Auditors, new Auditors are elected at the Extraordinary General Assembly Meeting to be convened upon the call of the Board of Directors.
The Auditors study all the accounts and transactions of the Association and report the results thereof to the Annual Meetings of the General Assembly.
If they so wish, the Auditors may attend Board Meetings on condition they should not participate in voting and still demand the inclusion in the Agenda of the Board of Directors of such issues as they deem necessary.
 
PART THREE
Other Provisions


Financial Provisions:
ARTICLE 17
- The Fiscal Year of the Association is 12 months' period beginning on 1st July.
The expenses mentioned in the budget endorsed at the General Assembly Meeting are divided among the members proportionate to the rights of votes determined as per Article 11 of this very Statute.
Each member is to deposit the participation share for expenses that falls with his portion with an account to be opened at the Central Bank by the end of June. Any participation share that has not been deposited by members in due time is collected by the Association through execution. Board Resolutions of the Association as regards to participation for expenses bear the quality of official documents mentioned in Article 68 of the Execution and Bankruptcy Law no. 2004.
In case of the termination of membership of the Association for any reason, participation shares for expenses that have been collected in advance are not refunded. The Board of Directors is authorized for the collection of those participation shares that have not been collected owing to the termination of membership to the Association for any reason within the frame of the provisions of Article 3.

The Revenues of the Association:
ARTICLE 18
- The revenues of the Association are provided through the following sources:
a) Participation Shares for Expenses calculated commensurate to the numbers of votes determined as per Article 11 of this very Statute based upon Article 81 of the Law,

b) The entry subscription the Participation Banks shall give for once the amount whereof shall be determined by the Board of Directors,

c) Surplus of revenues transferred from the previous year,

d) All kinds of donations,

e) Other revenues.

Manner of Registration to Association:
ARTCLE 19
- The Association keeps ledger journals, ledgers, membership registration books and other required books.
Undersigned copies of the minutes and resolutions of the General Assembly and Board Meetings along with the outgoing documents are kept in separate files in order with dates and numbers thereof.

Auditing:
ARTICLE 20
- The accounts and order of records of the Association are audited by independent auditing firms, the results whereof are conveyed to the Institution at the end of every March.

Abrogated Provisions:
ARTICLE 21
- The Ministerial Decree dated 04/10/2001 and no. 2001/3138 as regards to the enforcement of the Statute of the Association of Special Finance Houses has been annulled.

INTERIM ARTICLE 1 - On the date of the enforcement of this Statute, current Chairman and Board Members and the Auditors maintain their position until the first General Assembly Meeting where the election shall be held.
Enforcement:

ARTICLE 22 - This Statute is enforced on the date of the announcement thereof.

Execution:
ARTICLE 23
- The provisions of this Statute are executed by the Minister to whom the Banking Regulation and Supervision Agency is affiliated.

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