CENTRAL BANK OF THE REPUBLIC OF TURKEY LAW

Law Number: 1211
Date of Acceptance: 14/1/1970

PART I Establishment, Fundamental Duties and Powers, Capital

Establishment and title

ARTICLE 1 – (Amended article: 21/4/1994 – 3985/ art. 1) A bank has been established in Turkey as a joint-stock company under the title "Central Bank of the Republic of Turkey" with the exclusive privilege of issuing banknotes and possessing the duties and powers set forth in this Law.

The Bank is subject to private law provisions in cases where there is no explicit provision in this Law.

In this Law, the Central Bank of the Republic of Turkey is referred to as the "Bank".

Headquarters and branches

ARTICLE 2 – The headquarters of the Bank is in Ankara.

The Bank may establish a banknote printing house with the decision of the Bank Council and may open branches in cities of the country deemed necessary. Likewise, it may procure correspondents domestically and abroad.

(Amended: 2/7/2018 – Decree Law–703/ art. 151) The Bank's decisions on this matter are notified to the Presidency.

(Amended: 2/7/2018 – Decree Law–703/ art. 151) The Bank may likewise establish representative offices in foreign countries with the decision of the Bank Council and the consent of the President.

Memberships and participations

ARTICLE 3 – (Amended: 2/7/2018 – Decree Law–703/ art. 151) The Bank may become a member of international financial, economic and professional organizations in which central banks participate, with the decision of the Bank Council, and may participate as a shareholder in such organizations with the consent of the President.

Fundamental duties and powers

ARTICLE 4 – (Amended article: 25/4/2001 – 4651/ art. 1) The primary objective of the Bank is to achieve price stability. The Bank shall directly determine the monetary policy it will implement and the monetary policy instruments it will use in order to achieve price stability.

The Bank shall support the Government's growth and employment policies, provided that this does not conflict with the objective of achieving price stability.

The fundamental duties and powers of the Bank are as follows:

I- Fundamental duties of the Bank;

a) To conduct open market operations,

b) To take necessary measures together with the Government to protect the internal and external value of the Turkish Lira and to determine the exchange rate regime aimed at determining its parity against foreign currencies and gold, to conduct spot and forward purchases and sales of foreign exchange and effective currencies and the exchange of foreign currencies with Turkish Lira and other derivative transactions in order to determine the value of the Turkish Lira against foreign currencies,

c) (Amended subparagraph: 17/7/2019 – 7186/ art. 3) To determine the procedures and principles regarding required reserves and general liquidity based on the on-balance sheet or off-balance sheet items of banks and other financial institutions deemed appropriate by the Bank,

d) To conduct rediscount and advance transactions,

e) To manage the country's gold and foreign exchange reserves,

f) (Amended subparagraph: 20/6/2013 – 6493/ art. 38) To regulate the volume and circulation of the Turkish Lira, to establish payment and securities transfer and settlement systems, to ensure the uninterrupted operation and oversight of established and to-be-established systems and to make necessary regulations, to determine the methods and instruments to be used for payments, including electronic environment,

g) To take regulatory measures to ensure stability in the financial system and related to money and foreign exchange markets,

h) To monitor financial markets,

ı) To determine the maturities and types of deposits in banks and the maturities of participation accounts in special finance institutions.

II- Fundamental powers of the Bank;

a) The privilege of issuing banknotes in Turkey belongs exclusively to the Bank.

b) The Bank, together with the Government, determines the inflation target and determines the monetary policy in accordance with it. The Bank is solely authorized and responsible for the implementation of monetary policy.

c) The Bank is authorized to use the monetary policy instruments specified in this Law in order to achieve price stability, and to directly determine and implement other monetary policy instruments it deems appropriate.

d) The Bank is authorized to grant advances to the Savings Deposit Insurance Fund in extraordinary circumstances and in cases where the resources of the Fund are insufficient to meet its needs, in accordance with the procedures and principles it will determine.

e) The Bank carries out the business of granting credit to banks as the lender of last resort.

f) The Bank is authorized to request from banks the interest rates they will apply in lending operations and in accepting deposits, in accordance with the procedures and principles it will determine.

g) The Bank is authorized to request necessary information from banks and other financial institutions and from institutions and organizations responsible for regulating and supervising them, and to collect statistical information for the purpose of monitoring financial markets. (Added sentences: 17/7/2019 – 7186/ art. 3) The Bank's requests shall be met in real time and instantaneously. To ensure that these requests are met, access systems to the information processing systems of institutions and organizations may be established by the Bank. All kinds of procedures and principles regarding implementation shall be determined by the Bank.

III- Principal advisory duties of the Bank;

a) The Bank is the financial and economic advisor, financial agent and treasurer of the Government. (Amended second sentence: 2/7/2018 – Decree Law–703/ art. 151) The Bank's relationship with the Government is also provided through the President or a minister designated by the President.

b) The Bank gives opinions to the Government on matters requested regarding the financial system.

c) (Amended: 2/7/2018 – Decree Law–703/ art. 151) The Bank may notify the Presidency and the institutions and organizations authorized to regulate and supervise these institutions and organizations of its opinions and determinations regarding banks and other financial institutions it deems appropriate.

The Bank is authorized and responsible for making and implementing regulations related to the powers and duties given to it by this Law and legislation, and for auditing whether the institutions and organizations subject to these regulations act in accordance with them and whether the information sent to it is accurate.

The Bank shall independently fulfill and exercise the duties and powers given to it by this Law under its own responsibility.

In the event of bankruptcy of a bank, person or institution with which the Bank transacts during the use of monetary policy instruments, the Bank shall participate in the bankruptcy estate as a privileged creditor for the amount and interest it is owed.

Compensation lawsuits arising from the performance of duties by Bank personnel may only be filed against the Bank. The Bank's right of recourse is reserved.

Capital of the Bank, shares

ARTICLE 5– The capital of the Bank is 25,000,000 lira, divided into 250,000 shares of one hundred lira each. (Amended: 2/7/2018 – Decree-Law No. 703/ Art. 151) This capital may be increased with the approval of the President. The nominal values of the share certificates are 100, 200, 500, 1.000, 5.000 and 10.000 lira(1)

Type of share certificates

ARTICLE 6– The share certificates of the Bank are registered.

Classes of share certificates

ARTICLE 7– The share certificates are divided into classes (A), (B), (C) and (D).

(A) class share certificates

ARTICLE 8– Each of the (A) class share certificates is at least 100 shares. This class of share certificates belongs exclusively to the Treasury and may not fall below fifty-one percent of the capital.

[1] By the Ordinary General Assembly Decision dated 28/4/1988 and the Council of Ministers Decision dated 24/6/1988 and numbered 88/13075 on the Amendment of Certain Articles of the Bank's Articles of Incorporation, the capital was increased to 25.000.000.000 lira (25.000 TL pursuant to the Law No. 5083 on the Currency of the Republic of Turkey dated 28/1/2004); and the nominal values of the share certificates were increased to 100.000, 200.000, 500.000, 1.000.000, 5.000.000 and 10.000.000 lira (respectively 10 Kr, 20 Kr, 50 Kr, 1 TL, 5 TL, 10 TL pursuant to Law No. 5083).

(B) class share certificates

ARTICLE 9– (B) class share certificates are allocated to national banks operating in Turkey.

(C) class share certificates

ARTICLE 10– At most 15.000 of the share certificates are allocated as (C) class share certificates to other banks other than national banks and to privileged companies.

(D) class share certificates

ARTICLE 11– (D) class share certificates are allocated to Turkish commercial establishments and to legal and natural persons possessing Turkish citizenship.

Change of class in share certificates

ARTICLE 12– The Bank shall immediately conclude requests for the transfer of share certificates from one class to another. No commission shall be charged for the transfer of share certificates from one class to another.

The amount of (C) class share certificates may in no way exceed the amount accepted by this Law.

PART II Organization and Bodies of the Bank

Bodies

ARTICLE 13– (Amended article and heading: 25/4/2001 – 4651/ Art. 2) The bodies of the Bank are as follows:

a) General Assembly,

b) Bank Council,

c) Monetary Policy Committee,

d) Supervisory Board,

e) Presidency (Governorship),

f) Management Committee.

SECTION I General Assembly

Voting right

ARTICLE 14– The shareholders recorded in the Bank's shareholders' register constitute the General Assembly of the Bank. The General Assembly shall convene each year at the time determined by the Bank's Articles of Incorporation. Every person owning ten shares or representing this amount of shares has one vote.

Duties and powers of the General Assembly

ARTICLE 15– The General Assembly has the following duties and powers:

1. Examination of the annual report submitted by the Bank Council and the report of the Supervisory Board;

2. Examination and resolution of the Bank's balance sheet, profit and loss account;

3. Discharge of the members of the Bank Council and the Supervisory Board;

4. Increase of capital;

5. Amendment of the Articles of Incorporation;

6. Decision on the liquidation of the Bank.

Bank's Articles of Incorporation and liquidation

ARTICLE 16– a) (Amended: 2/7/2018 – Decree-Law No. 703/ Art. 151) The Bank's Articles of Incorporation enter into force with the approval of the General Assembly and a decision of the President. Amendments to be made to the Articles of Incorporation are also subject to this provision.

b) (Amended: 2/7/2018 – Decree-Law No. 703/ Art. 151) Decisions to be taken regarding the liquidation of the Bank before the expiry of the term(2) determined by Article 1 shall be valid with the approval of the President and provided that the commitments made by the Bank are fully performed within the law.

For both the amendment of the Articles of Incorporation and the adoption of a decision on liquidation, a two-thirds majority in the General Assembly is required.

Presidency

ARTICLE 17– The President (Governor) shall preside over the General Assembly.

Representation

ARTICLE 18– Persons who are not shareholders may not represent more than one vote as proxy at the General Assembly.

(Added paragraph: 3/4/2013 – 6456/ Art. 18) The last sentence of the first paragraph of Article 414 and Article 428 of the Turkish Commercial Code dated 13/1/2011 and numbered 6102 shall not apply to the Bank.

SECTION II Bank Council and Monetary Policy Committee (Amended heading: 25/4/2001 – 4651/ Art. 3)

Establishment

ARTICLE 19– The Bank Council is composed of the President (Governor) and six members to be elected by the General Assembly.

(Amended: 2/7/2018 – Decree-Law No. 703/ Art. 151) Unless the duties of the members are based on a special law or a Presidential Decree, they may not combine with any legislative, official or private

[2] The provision in the third paragraph of Article 1 of Law No. 1211 stating "The term of the Bank and of the banknote issuance privilege shall continue until the end of 1999. The term of this privilege may be extended until five years remain to its expiry." was repealed by Article 1 of Law No. 3985 dated 21/4/1994.

any duty outside the Bank. Furthermore, these members cannot engage in commerce, nor can they be shareholders in banks and companies. Duties in charitable associations and foundations whose purposes are charitable, social and educational, and membership in non-profit cooperatives are outside this provision.

Members of the Bank Council must have higher education, and possess knowledge and experience in banking or in the fields of economics and finance.

The President (Governor) is the Chairman of the Bank Council.

(Amended: 2/7/2018 – Decree-Law No. 703/ Article 151) The salaries and compensations of the members of the Bank Council are determined by the President. Travel expenses incurred by those residing outside the Bank's headquarters to attend Council meetings are paid by the Bank.

Term of office

ARTICLE 20– The term of office of the members of the Bank Council is three years.

One third of the Council members are renewed each year. The members who will leave the Bank Council at the end of the first and second years are determined by drawing lots.

Members whose terms have expired may be re-elected.

Meetings, decisions and withdrawal from voting

ARTICLE 21– Members of the Bank Council cannot participate in deliberations and cannot vote on credit matters concerning themselves or persons with whom they have a kinship or interest relationship at the degrees specified in paragraph 3 of Article 245 of the Code of Civil Procedure.

Bank Council meetings are held in Ankara. If necessary, meetings may also be held elsewhere. Meetings are held at least once a month upon the call of the President (Governor). The agenda is prepared by the Presidency (Governorship). Matters that members wish to discuss outside the agenda are included in the agenda and discussed at the same meeting if the President (Governor) also agrees; otherwise, it may be decided to include them in the agenda of the next meeting.

The Bank Council convenes with the participation of at least two-thirds of the members and decides by majority of the members present. In case of equality of votes, the proposal of the side joined by the President is deemed accepted.

Deputy Presidents (Deputy Governors) may attend Bank Council meetings without voting rights.

Duties and powers of the Bank Council

ARTICLE 22– (Amended article: 25/4/2001 – 4651/ Article 3)

The Bank Council;

a) Taking decisions on the monetary policy that can be implemented in line with the monetary policy strategy and inflation target and on the monetary policy instruments that can be used,

b) Making regulations and taking decisions on matters relating to the replacement, withdrawal from circulation and destruction of banknotes in circulation,

c) Determining the procedures and principles and making the necessary regulations regarding open market operations, foreign exchange and effective operations, rediscount and advance transactions and rediscount and advance interest rates, reserve requirements and general disponibility, other monetary policy transactions and instruments, and the management of the country's gold and foreign exchange reserves,

d) Taking decisions on the matters regulated in paragraphs (I) and (III) of Article 40,

e) (Amended: 20/6/2013 – 6493/ Article 39) Taking decisions on the establishment of payment and securities transfer and settlement systems under conditions that will increase their reliability and effectiveness, determining the procedures and principles of payment methods and instruments, and making regulations regarding the oversight of clearing houses,

f) (Amended subparagraph: 13/2/2011 – 6111/ Article 159) Determining the procedures and principles regarding requesting information and collecting statistical information,

g) Making regulations and taking decisions on matters relating to opening branches, obtaining correspondents, establishing representative offices and bureaus, and the Banknote Printing House,

h) Taking decisions on matters relating to provisions and reserves and determining the procedures and principles regarding the transfer of the balance after profit distribution to the Treasury,

ı) Preparation of the Bank's budget, annual activity report, balance sheet, profit and loss accounts and the General Assembly agenda,

j) Making proposals to the General Assembly regarding capital increase and amendments to the Articles of Association,

k) Approval of the regulations prepared regarding the Bank's administration, organization and services and its personnel,

l) Taking decisions on the purchase or acquisition of real estate for the Bank's needs, the sale, exchange, donation and other transactions of real estate owned by it when necessary,

m) Deciding on donations, settlements, releases, waivers and cancellations regarding amounts and values outside the scope of the powers to be delegated to the Bank's other bodies,

n) Approval of the Bank's personnel positions,

o) Taking decisions and making regulations on other matters falling outside the matters subject to the decision of the Monetary Policy Committee in this Law, which will be submitted by the Presidency (Governorship) for examination and approval,

is tasked and authorized.

(Additional second paragraph: 13/2/2011 – 6111/ Article 159) The Bank Council may, when necessary, delegate some of its powers to other bodies, provided that it clearly determines their limits in writing.

Monetary Policy Committee

ARTICLE 22/A– (Additional article: 25/4/2001 – 4651/ Article 4)

(Amended: 2/7/2018 – Decree-Law No. 703/ Article 151) The Monetary Policy Committee consists of the President (Governor) as chairman, the Deputy Presidents (Deputy Governors), one member to be elected by the Bank Council from among its members, and one member to be appointed upon the proposal of the President (Governor). The Deputy Minister of Treasury and Finance or a unit head designated by the Minister may attend the meetings without voting rights. The membership of the Monetary Policy Committee of those whose terms as Presidency (Governorship), Deputy Presidency (Deputy Governorship) and Bank Council membership have ended shall also terminate.

(Amended: 2/7/2018 – Decree-Law No. 703/ Article 151) The member to be appointed must have studies on monetary policy and must have an academic title in one of the fields of economics, business administration, banking and finance, have worked at least ten years in the field related to his/her duty, and have sufficient knowledge and experience. The term of office of this member is five years.

The prohibitions in Article 19 also apply to the appointed member. However, duties to be taken at universities are outside this provision. The appointed member has the same financial and social rights as the members of the Bank Council.

(Amended paragraph: 18/1/2017 – 6770/ md. 5) Monetary Policy Committee meetings are held at least eight times a year upon the call of the President (Governor). The other provisions of the second paragraph and the third paragraph of Article 21 shall also apply to Monetary Policy Committee meetings.

The Monetary Policy Committee;

a) Determining monetary policy principles and strategies in order to ensure price stability,

b) Determining the inflation target together with the Government within the framework of the monetary policy strategy,

c) Preparing reports on monetary policy targets and practices for specific periods and informing the Government and the public in accordance with the principles it shall determine,

d) Taking the necessary measures together with the Government to protect the internal and external value of the Turkish Lira and determining the exchange rate regime aimed at establishing its parity against foreign currencies and gold,

is tasked and authorized.

The Monetary Policy Committee determines the matters it shall announce and the manner of their announcement. The matters requested by the Monetary Policy Committee to be announced in the Official Gazette shall be announced without delay.

Monetary Policy Committee decisions are executed by the President (Governor) and submitted to the knowledge of the Bank Assembly.

CHAPTER III Supervisory Board

Establishment, term and qualifications(3)

ARTICLE 23– (Amended article: 3/4/2013 – 6456/ md. 19)

The Supervisory Board consists of four members to be elected by the General Assembly. In the event that a member of the Supervisory Board leaves membership, the other members of the Supervisory Board shall elect someone who meets the conditions for election to serve until the first meeting of the General Assembly.

The term of office of the members of the Supervisory Board is two years.

Those to be elected to membership of the Supervisory Board must have higher education and possess knowledge and experience in the fields of banking and accounting.

Duties and prohibitions

ARTICLE 24– The Supervisory Board supervises all transactions and accounts of the Bank. The Presidency (Governorship) is obliged to provide all information and documents requested by the Supervisory Board. (Amended: 2/7/2018 – KHK–703/ md. 151) The Supervisory Board has no executive authority; it reports its opinions in writing to the Bank Assembly and a copy

[3] In accordance with Article 60 of Law No. 6456 dated 3/4/2013, the effective date of this article has been set as 1/5/2013.

it also submits to the Presidency of the Republic of Turkey. At the end of the year, the Board submits the report it prepares regarding transactions and accounts to the General Assembly.

Members of the Supervisory Board cannot participate in the profits of the Bank.

(Amended: 2/7/2018 – KHK–703/ md. 151) The fee to be paid to the members of the Supervisory Board is determined by the President of the Republic of Turkey. Travel expenses to be borne by those residing outside the Bank's headquarters shall be paid by the Bank.

CHAPTER IV Presidency (Governorship)

A) President (Governor)

Appointment, qualifications and term of office

ARTICLE 25– (Amended article: 25/10/1990 – 3670/ md. 10) (Repealed first paragraph: 2/7/2018 – KHK–703/ md. 151) The President (Governor) must have higher education and possess knowledge and experience in the fields of finance, economics and banking.

Duty, representation and authority

ARTICLE 26– The President (Governor), in the capacity of the highest executive officer, directs and manages the Bank and represents it domestically and abroad.

The powers of the President (Governor) are shown below:

1. To ensure the execution of the provisions of this Law and the decisions to be taken by the Bank Assembly;

2. To take the measures it deems appropriate for the performance of the duties assigned to the Bank by this Law and, in cases it deems necessary, to make proposals to the Bank Assembly regarding them.

In case of opposition to the decisions of the Bank Assembly, the President (Governor) may postpone the execution of the decision and request its reconsideration at the next meeting. In urgent cases, the Bank Assembly shall convene upon the invitation of the President (Governor) and reconsider the matter in dispute. (Amended: 2/7/2018 – KHK–703/ md. 151) If no agreement is reached between the President (Governor) and the Bank Assembly, the President of the Republic of Turkey shall arbitrate.

Prohibitions

ARTICLE 27– (Amended: 2/7/2018 – KHK–703/ md. 151) The office of the Presidency (Governorship) cannot be combined with any legislative, official or private duty outside the Bank unless it is based on a special law or a Presidential Decree. Furthermore, the President (Governor) cannot engage in commerce, nor can he/she be a shareholder in banks and companies. Duties in charitable associations and foundations whose purpose is directed towards charitable, social and educational affairs, and membership in non-profit cooperatives are outside the scope of this provision.

The participation of the President (Governor) in interministerial committee meetings at the level of Ministers and undersecretaries shall not be deemed contrary to the provision of the first paragraph.

Temporary absence, removal from office

ARTICLE 28– In the temporary absence of the President (Governor), a Vice President (Governor) whom he/she shall appoint shall act on his/her behalf.

The President (Governor) may be removed from office only in cases where the prohibitions in Article 27 occur and situations arise that make it impossible for him/her to continuously perform the duties assigned to him/her by this Law, in accordance with the procedure for his/her appointment.

In the event that the Presidency (Governorship) becomes vacant, a Vice President (Governor) to be elected as acting President (Governor) by the Bank Assembly, which shall convene under the chairmanship of the oldest member, shall perform the duty of the Presidency (Governorship) and exercise its powers.

B) Vice Presidents (Governors)

Qualifications, appointment, duties and prohibitions

ARTICLE 29– (Amended article: 25/4/2001 – 4651/ md. 5) Four Vice Presidents (Governors) are appointed to assist the President (Governor). (Amended: 2/7/2018 – KHK–703/ md. 151) Vice Presidents (Governors) are appointed from among persons who have completed undergraduate or graduate studies in one of the fields of law, finance, economics, business administration, banking, finance, engineering, public administration, political science, international relations and statistics, or in faculties of economic and administrative sciences, and who have sufficient knowledge and experience. (Repealed third sentence: 2/7/2018 – KHK–703/ md. 151) The first paragraph of Article 27 and the second paragraph of Article 28 shall also apply to Vice Presidents (Governors).

CHAPTER V Management Committee

Establishment, duty

ARTICLE 30– The Management Committee is established from the Vice Presidents (Governors) under the chairmanship of the President (Governor). In cases where the President (Governor) cannot preside, the Deputy President (Governor) whom he appoints shall preside over the Management Committee.

The duties of the Management Committee are shown below:

1. In cases deemed necessary by the President (Governor), to examine in advance the matters to be decided by the Bank Council and prepare the proposals to be made to the Bank Council;

2. To prepare the regulations concerning the administration, organization and services of the Bank;

3. To take decisions on matters left to the decision of the Management Committee by the regulations;

4. To ensure coordination in the Bank's operations;

5. To carry out transactions such as appointment, determination of salaries, dismissal and retirement of officers and employees other than the personnel whose appointments are made by the Bank Council.

In the meetings of the Management Committee, decisions are taken by a majority of the full number of members. In case of equality of votes, the proposal joined by the President (Governor) shall be deemed accepted.

PART VI Branches Organization

Establishment, duty

ARTICLE 31– The organization and duties of the Bank's head office and branches and the Banknote Printing House, and the establishment and duties of the management committees of these branches and the Banknote Printing House shall be determined by regulations.

PART III Provisions Concerning Bank Personnel

Personnel status

ARTICLE 32– The Bank's personnel consists of the Bank's officers and the workers of the Banknote Printing House.

The term (Bank officer) refers to persons appointed to perform permanent and continuous duties required by the Bank's services.

The provisions of the State Personnel Unions Law No. 624 shall apply to the unions established and to be established by Bank officers. The prohibition in Article 20 of Law No. 275 dated 15/7/1963 shall also apply to the Bank's services.

Bank personnel are subject to the provisions of this Law and the status regulations to be issued by the Bank Council.

Domestic and foreign experts may be employed on a contractual basis by decision of the Bank Council.

Remuneration regime

ARTICLE 33– (Amended: 2/7/2018 – Decree Law No. 703/ Art. 151) The monthly salaries and representation allowances of the Bank President (Governor) and Deputy Presidents (Governors) shall be determined by the President of the Republic.

The additional remuneration to be paid to the Chairman and Members of the Management Committee, and to the Chairmen and Members of the Management Committees of the Branches and the Banknote Printing House, due to these duties, provided that it does not exceed two-thirds of their salaries, shall be determined by the Bank Council.

The salaries of other officers shall be determined by the Bank Council and the Central Management Committee, which are authorized to appoint them, taking into account the above-mentioned remunerations. The principles to be taken into consideration in this determination, as well as duty travel allowances and all other matters pertaining to officers, shall be specified in the status regulation indicated in Article 32.

Retirement of personnel

ARTICLE 34– (Amended paragraph: 3/4/2013 – 6456/ Art. 20) With the exception of workers, the provisions of subparagraph (c) of the first paragraph of Article 4 of the Social Insurance and General Health Insurance Law No. 5510 dated 31/5/2006 shall apply to Bank members and members of the Bank Council.

On the date this Law enters into force, the retirement contributions of those employed at the Bank shall be deducted over their contribution-based salaries determined by Law No. 5434. In their salary increases, the provision of the second paragraph of subparagraph (B) of Article 15 of the same Law shall apply to them. The provisions of the same Law shall also apply to contracted personnel coming from positions subject to retirement.

The retirement contribution-based salaries of those appointed after the date this Law enters into force shall be determined in accordance with the provision of subparagraph (B) of Article 15 of Law No. 5434.

(Amended paragraph: 6/7/1995 – Decree Law No. 562/ Art. 21) In terms of retirement, the additional indicator and position compensation determined for Ministry Undersecretaries shall apply to the Bank President (Governor), those determined for Deputy Ministry Undersecretaries shall apply to Deputy Presidents (Governors), and for other personnel, the position compensations determined for similar positions in the classes they may enter according to the Civil Servants Law by virtue of the duties they perform shall apply. The periods they spend in these positions shall be considered as having been spent in positions requiring the payment of position compensation in accordance with Additional Article 68 of the T.C. Retirement Fund Law No. 5434.

Confidentiality and responsibility

ARTICLE 35– Bank members are obliged to observe the confidentiality of secrets they learn due to their titles and duties, pertaining to the Bank or to persons and institutions having relations with the Bank, and not to disclose these secrets in any way to anyone other than the authorities legally authorized.

This obligation continues even if they leave the Bank.

Bank members are subject to the tort provisions of the Code of Obligations for damages they cause to the Bank in connection with their duties.

PART IV Duties and Powers of the Bank

CHAPTER I Banknote Issuance

Banknote issuance and circulation obligation

ARTICLE 36– a) The circulation of banknotes issued and to be issued by the Bank is mandatory, and they have unlimited payment power.

b) (Amended paragraph: 25/4/2001 – 4651/ Art. 6) The Bank also has the authority to issue banknotes due to the transactions written in Articles 45, 52 and 53.

Replacement of banknotes

ARTICLE 37– a) The Bank may replace banknotes in circulation with new issues when it deems necessary.

Old banknotes withdrawn from circulation become time-barred 10 years after the date the replacement process begins.

Both the date the replacement process will begin and the mandatory circulation period of the old banknotes within this 10-year period shall be determined by the Bank Council and the situation shall be announced in the Official Gazette.

b) (Amended: 2/7/2018 – Decree Law No. 703/ Art. 151) Worn and torn banknotes shall be replaced by the Bank with reserve banknotes in accordance with the principles to be determined between the Presidency of the Republic and the Bank and according to the fitness procedure to be accepted by regulation.

c) The principles regarding the cancellation and destruction of banknotes withdrawn from circulation and banknotes replaced due to being worn, torn or partially damaged shall be specified in the regulation.

Coins

ARTICLE 38– (Repealed article: 28/5/1970 –1264/ Art. 10)

CHAPTER II Duties and Powers Regarding the Protection of the Stability of the Turkish Currency

Matters to be announced

ARTICLE 39– (Amended article: 6/12/1984 – 3098/ Art. 4)

The Bank shall announce the rediscount, discount and interest rates it will apply in its own transactions, to be determined from time to time by the Bank Council, and the conditions of the open market policy.

Pursuant to Article 4, the gold and foreign exchange purchase and sale prices to be determined by the Bank Council and the decisions taken in accordance with paragraphs 3 and 5 of Article 22 shall be announced in the Official Gazette.

Duties and powers of the Bank regarding monetary-credit

ARTICLE 40– (Amended article: 25/4/2001 – 4651/ art. 7)

I- a) The Bank, in its capacity as lender of last resort, may provide intraday or end-of-day credit to the system against collateral in order to eliminate temporary liquidity shortages that may cause disruptions in the payment system and technical-origin payment problems that may prevent financial markets from operating effectively.

b) (Repealed paragraph: 19/10/2005 – 5411/ art. 168)

c) In the event that uncertainty and insecurity arise in the banking system and fund withdrawals accelerate, the Bank may grant credit to banks about which uncertainty and insecurity have arisen, in an amount to meet fund withdrawals, with conditions to be determined by the Bank. In the event of bankruptcy of banks to which credit has been granted under this provision, the Bank shall participate in the bankruptcy estate as a privileged creditor for the amount of credit granted and its interest.

II- (Amended paragraph: 19/10/2005 – 5411/ art. 168)

(Amended paragraph: 17/7/2019 – 7186/ art. 4) Banks and other financial institutions deemed appropriate by the Bank, including institutions issuing electronic payment instruments, shall establish required reserves in cash in accounts to be opened with the Bank, based on on-balance sheet or off-balance sheet items deemed appropriate. The scope of on-balance sheet or off-balance sheet items deemed appropriate subject to required reserves, the ratio of required reserves, the establishment period and the interest rate to be paid on established reserves when necessary, including extraordinary withdrawals from deposits or participation funds and transactions to be carried out in cases of merger, transfer and division, and all kinds of procedures and principles regarding implementation shall be determined by the Bank.

(Amended: 17/7/2019 – 7186/ art. 4) The nature and ratio of the general disponibility to be maintained by the institutions specified above shall be determined by the Bank when necessary.

If, according to the regulation to be made by the Bank, it is requested that required reserves be held as blocked in accounts with the Bank, the required reserves held in blocked accounts cannot be used for the financing of any purpose or matter, and cannot be assigned or seized.

In the event that required reserves and general disponibility are not established in due time or are established incompletely, the Bank is authorized, according to the procedures and principles it will determine, to request that non-interest-bearing deposits be held in accounts with the Bank for the deficient portion or to accrue penal interest. Accrued penal interest receivables shall be collected in accordance with the provisions of the Law No. 6183 on the Procedure for the Collection of Public Receivables. Collected penal interests shall be recorded as income to the Savings Deposit Insurance Fund.

III- a) Within the framework of the powers granted to the Bank by legislation for the purpose of carrying out the Bank's fundamental duties and powers, banks shall notify the Bank, according to the principles to be determined, of the interest rates they will apply in lending operations and acceptance of deposits.

b) The Bank shall determine the maturities and types of deposits in banks and the maturities of participation accounts in special finance institutions.

c) (Added paragraph: 19/1/2022 – 7351/ art. 1) Money, receivables, property, rights and assets belonging to foreign country central banks held with the Bank cannot be seized, and no precautionary measure or precautionary attachment can be placed on them.

PART III Relations of the Bank with the Government and Related Duties

Financial and economic advisory and financial agency

ARTICLE 41– (Amended article and heading: 13/2/2011 – 6111/ art. 160)

The Bank is the financial and economic consultation organ of the Government. In this capacity, the Bank shall express its opinion on matters requested by the Government to be examined regarding monetary and credit policy.

The financial agency of the Government may be given to the Bank in the State's international financial and economic relations.

(Amended: 2/7/2018 – Decree Law–703/ art. 151) The Bank may be assigned to perform the financial service of all kinds of State domestic debt securities, foreign exchange control and foreign trade regime implementation or similar transactions in accordance with special laws, Presidential Decrees or decisions based on them. No liability can be attributed to the Bank by third parties due to the transactions it performs in this capacity.

The Bank, upon the request of the Undersecretariat of Treasury, shall perform or have performed the State's collections and payments both domestically and in foreign countries and all Treasury transactions and all kinds of money transfer and remittance transactions domestically and abroad. The fee to be applied for these transactions shall be determined by the Bank.

The procedures and principles regarding the earning of interest on deposits belonging to the Undersecretariat of Treasury shall be determined jointly by the Bank and the Undersecretariat of Treasury.

Special audit and informing the public

ARTICLE 42– (Amended article and heading: 25/4/2001 – 4651/ art. 8)

(Amended: 2/7/2018 – Decree Law–703/ art. 151) The President may have the Bank's transactions and accounts audited. The Presidency may request all kinds of information from the Bank on this matter.

The Bank may have its balance sheet, profit and loss accounts audited by independent audit institutions.

(Amended: 2/7/2018 – Decree Law–703/ art. 151) A report on the Bank's activities and the monetary policy implemented and to be implemented shall be submitted to the President by the Governor in April and October of each year. The Bank shall inform the Grand National Assembly of Turkey Plan and Budget Committee twice a year regarding its activities.

The Bank shall prepare periodic reports on monetary policy targets and practices and announce them to the public. The periods for which the reports will be prepared, their scope and the method of disclosure shall be determined by the Bank. In the event that the determined targets are not reached within the announced periods or the possibility of not being reached arises, the Bank shall notify the Government in writing of the reasons and the measures to be taken and disclose them to the public.

PART IV Requesting Information (Amended heading: 13/2/2011 – 6111/ art. 160)

Authority to request information, balance sheets and reports of banks (Amended heading: 6/12/1984 – 3098/ Art. 6)

ARTICLE 43– (Amended article: 25/4/2001 – 4651/ Art. 9)

All banks, special finance institutions and other financial institutions deemed appropriate by the Bank operating in Turkey are obliged to submit to the Bank their annual balance sheets and profit and loss accounts, together with the board of directors and auditor reports, within at most one month from the date of the general assembly meeting; and the audit reports to be prepared by independent audit institutions within at most one month from the date of their preparation.

The Bank is authorized to request all kinds of information and documents from the institutions and organizations specified in the first paragraph, within the framework of the procedures and principles it will determine, in order to fulfill the duties assigned to it by this Law and the legislation. The institutions and organizations specified in the first paragraph are obliged to provide the information requested from them within the period to be specified by the Bank. The Bank may, when necessary, restrict or suspend the transactions subject to the authorities granted by this Law of the institutions and organizations specified in the first paragraph that fail to provide the information that must be given to it accurately and in a timely manner.

(Amended: 2/7/2018 – Decree Law No. 703/ Art. 151) The Bank may request information from the institutions and organizations responsible for regulating and supervising the institutions and organizations specified in the first paragraph, regarding matters within its own authority and field of duty. The Bank may, when necessary, notify the Presidency and the Banking Regulation and Supervision Agency and other institutions and organizations authorized to regulate and supervise the institutions and organizations specified in the first paragraph, of its opinions and determinations regarding the institutions and organizations specified in the first paragraph.

The Bank may cooperate with public institutions and organizations, the Undersecretariat of Treasury, the State Institute of Statistics, the authorities of other countries authorized to collect statistical information, and international organizations in the collection of statistical information. The Bank has the authority to directly request and collect from banks, other financial institutions and persons all statistical information related to the financial system and other statistical information deemed necessary for monitoring developments in the economy and the balance of payments. Those from whom information is requested are obliged to provide this information accurately in accordance with the procedures and principles to be determined by the Bank. The Bank is authorized to investigate and audit whether this information is accurate before the relevant parties, and to request additional information and documents.

The Bank may publish the statistical information it deems necessary. However, the Bank may not publish or disclose the personal and private nature of the collected statistical information, and may not give it to any official or private authority other than the Banking Regulation and Supervision Agency. This information may not be used for purposes other than statistical purposes or as evidence.

Authority to request information from real and legal persons

ARTICLE 44– (Repealed article: 13/2/2011 – 6111/ Art. 160; Re-arranged: 28/11/2017 – 7061/ Art. 33) The Bank is authorized to request all kinds of information and documents from the real and legal persons it will determine, in order to monitor the transactions of real and legal persons affecting their foreign exchange position. The scope of the information and documents to be requested, the method of collection and monitoring, the audit of accuracy, sharing, including the procurement of support services, and the procedures and principles are determined by the Bank.

In the application of this article, the provisions of Article 35 and subparagraph (a) of paragraph (II) of Article 68 of this Law shall also be applied to the employees of the support service organization.

PART V Transactions to be Performed by the Bank

SECTION I Transactions with Credit Institutions

Acceptance of bills and documents for rediscount and advance

ARTICLE 45– (Amended article: 25/4/2001 – 4651/ Art. 10) (Amended paragraph: 20/8/2016 – 6745/ Art. 13) The Bank may accept for rediscount commercial bills and documents to be given by banks, provided that they bear at least two signatures it deems reputable, within the principles it will determine. The types of commercial bills to be accepted for rediscount and all other matters are determined by the Bank. The maximum limit of the loans to be granted pursuant to this article and the limits according to loan types are determined by the Bank, taking into consideration the principles of monetary policy.

The Bank may also grant advances against the bills it may accept for rediscount.

Medium-term rediscount and advance transactions

ARTICLE 46– (Repealed article: 25/4/2001 – 4651/ Art. 16)

Maximum amount of bills to be accepted for rediscount or advance

ARTICLE 47– (Repealed article: 25/4/2001 – 4651/ Art. 16)

Advance against bonds

ARTICLE 48– (Repealed article: 25/4/2001 – 4651/ Art. 16)

Central and Branch Discount Committees

ARTICLE 49– (Repealed article: 25/4/2001 – 4651/ Art. 16)

SECTION II Transactions with the Treasury and Public Institutions

Short-term advance to the Treasury ARTICLE 50– (Repealed article: 25/4/2001 – 4651/ Art. 16)

Credit to public institutions ARTICLE 51– (Repealed article: 25/4/2001 – 4651/ Art. 16)

SECTION III

Open market operations ARTICLE 52– (Amended article: 25/4/2001 – 4651/ Art. 11)

The Bank may, within the framework of the objectives of monetary policy, in order to effectively regulate the money supply and the liquidity of the economy, conduct open market operations such as outright purchase and sale of securities against Turkish Lira, sale with repurchase promise and purchase with resale promise, lending and borrowing of securities, taking and giving Turkish Lira deposits, and may intermediary such transactions. The open market operations to be resorted to by the Bank and the procedures and principles related to these transactions, and the highly liquid and low-risk instruments to be subject to open market operations are determined by the Bank.

The Bank may, within the framework of open market operations, issue liquidity bills for its own account and name with a maturity not exceeding ninety-one days, which can be bought and sold in the secondary market. However, the matters of preventing liquidity bills from gaining the quality of being a continuous alternative investment instrument and keeping their issuance limited only to the purpose of increasing the effectiveness of open market operations are taken into consideration. The agreement period of the Bank's sale with repurchase promise and purchase with resale promise transactions and Turkish Lira deposit transactions cannot exceed ninety-one days; the start of the period is the value date of the transactions.

The Bank is authorized to determine the institutions and organizations related to the transactions falling within the scope of this article, among banks and intermediary institutions determined in accordance with the Capital Markets Law No. 2499, taking into consideration the nature of the transaction.

Open market operations shall be conducted solely for monetary policy purposes and cannot be carried out for the purpose of granting credit to the Treasury, public institutions and organizations, and other institutions and organizations.

PART IV

Transactions related to gold and foreign exchange ARTICLE 53 – (Amended article: 25/4/2001 – 4651/ art. 12)

a) The Bank may, within the framework of the monetary policy it implements, in order to determine the value of the Turkish Lira against foreign currencies, conduct spot and forward purchases and sales of foreign exchange and effective currencies, and the exchange of foreign currencies with Turkish Lira and other derivative transactions, with their conditions determined in advance.

b) The Bank manages the country's gold and foreign exchange reserves within the framework of monetary policy objectives and practices. For this purpose, the Bank may, in accordance with the procedures and principles it shall determine by taking into account, respectively, the priorities of safe investment, liquidity and return, engage in forward or

spot gold, foreign exchange, securities, derivative product purchase and sale, borrowing and lending transactions in domestic and foreign markets, including all banking activities.

Loan limits

ARTICLE 54 – (Repealed article: 25/4/2001 – 4651/ art. 16)

PART V

Other transactions

ARTICLE 55 – The Bank may perform banking transactions and services to be determined by the Bank Council.

The Bank shall supervise the operations of interbank clearing houses that may be established, currently or in the future, in locations where branches are located.

SECTION VI

Transactions the Bank cannot perform

ARTICLE 56 – (Amended article: 25/4/2001 – 4651/ art. 13) The Bank cannot grant advances or open credits to the Treasury and public institutions and organizations, and cannot purchase debt instruments issued by the Treasury and public institutions and organizations from the primary market.

The Bank cannot grant advances or open credits other than the transactions authorized by this Law, the advances it grants and the credits it opens cannot be unsecured or without collateral, it cannot act as a guarantor in any manner whatsoever, and cannot provide collateral except for transactions directly related to itself.

SECTION VII Bank Accounts and Balance Sheet, Bulletin, Exemption, Immunity and Miscellaneous Provisions

PART I

Bank accounts and balance sheet accounting period

ARTICLE 57 – The accounting period of the Bank is the calendar year.

Balance sheet and report

ARTICLE 58 – (Amended: 2/7/2018 – Decree Law No. 703/ art. 151) The Bank shall submit the balance sheet and profit and loss account it shall prepare as of the end of each calendar year, along with the annual activity report, to the Presidency of the Republic of Turkey before the convening of the General Assembly and shall publish the balance sheet in the Official Gazette.

Provisions and special reserves

ARTICLE 59 – From the annual gross profit of the Bank, provisions may be set aside in amounts deemed appropriate by the Bank Council to cover specific risks that may arise in subsequent years due to transactions peculiar to the Bank.

Differences arising from banknotes that have become time-barred and from the exchange made pursuant to paragraph (b) of Article 37 shall be transferred to special reserves.

Distribution of profit

ARTICLE 60 – The annual net profit of the Bank shall be distributed as follows:

a) (Repealed subparagraph: 17/7/2019 – 7186/ art. 5)

b) To the shareholders as a first dividend of 6% on the nominal values of the shares;

c) (Amended: 17/7/2019 – 7186/ art. 5) At most 5% of the amount remaining after deducting the above percentage, to the Bank's personnel not exceeding two months' salary, and 10% to the reserve fund;

d) To the shareholders as a second dividend of at most 6% on the nominal values of the shares, by decision of the General Assembly.

The balance remaining after this distribution shall be given to the Treasury.

(Added paragraph: 17/7/2019 – 7186/ art. 5) Except for the reserve fund set aside from the profit of the last year, accumulated reserve funds may be distributed by adding them to the profit each year.

Valuation differences

ARTICLE 61 – (Amended article and heading: 23/7/2010 – 6009/ art. 21)

Valuation differences arising from the valuation of foreign exchange, effective currencies and other assets and liabilities denominated in foreign currency and gold in the assets and liabilities of the Bank due to changes in the value of the Turkish Lira against foreign currencies and gold prices in international markets shall be monitored in a separate account.

Unrealized valuation differences in favor of the Bank arising from the valuation of foreign exchange, effective currencies and other assets and liabilities denominated in foreign currency and gold in the assets and liabilities of the Bank due to changes in the value of the Turkish Lira against foreign currencies and gold prices in international markets shall not be included in the income of the period in which the valuation is made and shall not be taken into account as income in the determination of the corporate tax base. Unrealized valuation differences arising against the Bank shall not be deducted from the income of the period in which the valuation is made and shall not be taken into account as an expense in the determination of the corporate tax base.

The provision of Article 280 of the Tax Procedure Law No. 213 shall not be applied in the valuation to be made within the scope of this article.

Liquidation

ARTICLE 62 – The liquidation principles to be applied in the event that the Bank enters into liquidation shall be determined by a law. From the net assets resulting from the liquidation, first the value of the shares shall be paid. After the shares are paid at par, 80% of the remaining amount shall be distributed to the Government and 20% to the shareholders.

PART II

Bank bulletin

ARTICLE 63 – The Bank shall publish a bulletin briefly showing its account status as of the end of each week and shall also announce it in the Official Gazette.

In this bulletin, on the one hand, the cash balance, gold balance, foreign exchange position, total of bills payable domestically, deposits in foreign countries, other assets it is creditor for; on the other hand, its capital, reserve funds, amount of banknotes in circulation, deposits with the Bank and other assets it is debtor for, as well as the current rediscount, discount and interest rates related to the Bank's own transactions shall be shown.

This bulletin shall be sent to the institutions deemed necessary and to foreign central banks.

PART III Exemption, Immunity and Miscellaneous Provisions

Exemption from tax, duty and fee

ARTICLE 64– The Bank's capital, reserve fund, the profit accruing to (A) class shares, and the bullion or minted gold it will import; the imports to be made for the Banknote Printing House and its equipment are exempt from all kinds of taxes, duties and fees.(4)

The Bank is exempt from the Stamp Tax and all kinds of duties and fees that it must pay on its own behalf due to all papers, announcements and the like relating to the Bank's transactions.

Tariff to be applied in value transfers

ARTICLE 65– In the transfers of all kinds of minted and bullion gold and Turkish Lira banknotes and bonds and bills and foreign cash currencies belonging to the Bank by Turkish Airlines A.O., the Turkish Republic State Railways Administration and the Maritime Bank T.A.O. and D.B. Deniz Nakliyatı T.A.Ş. vehicles, the freight tariff based on weight is applied in their transfers.

Nature of the Bank's books and records

ARTICLE 66– All kinds of documents, records, books and deeds of the Bank and the account summaries based on them are considered official documents.

Domicile of the debtor

ARTICLE 67– The address shown by the debtor or their guarantors at the time of transacting with the Bank is considered the legal domicile. Subsequent changes do not alter the jurisdiction of the court and execution.

[4] The provisions of exemption from all kinds of taxes, duties and fees collected on importation have been repealed by Article 1 of the Law No. 3283 dated 6/5/1986 on the Abolition of Customs Exemptions Granted by Certain Laws. However, in accordance with Article 2 of the same Law, by the Council of Ministers Decision No. 95/7536 dated 27/11/1995 published in the Official Gazette No. 22513 dated 4/1/1996, it was decided that “the machinery, equipment and operating materials to be imported by the Banknote Printing House for use in the production of banknotes and valuable documents shall be exempt from customs duty and the Mass Housing Fund”.

Penal provisions (Amended title: 25/4/2001 – 4651/ art. 15)

ARTICLE 68– (Amended article: 23/1/2008 – 5728/ art. 341)

I- Of this Law;

a) For the officials and relevant persons of banks and other financial institutions and organizations that do not comply with the regulations made by the Bank within the framework of the powers given in the fourth paragraph of Article 4 and Article 52 concerning open market operations; that do not establish within the time period the rates determined for required reserves and general disponibility pursuant to paragraph (II) of Article 40, or that establish them incompletely, a judicial fine from two hundred days to four hundred days,

b) (Amended: 13/2/2011 – 6111/ art. 161) For the officials and relevant persons of banks and other financial institutions and organizations that do not provide the information and documents specified in the first and second paragraphs of Article 43 or provide false information and documents, or that prevent the performance of the audit envisaged in the fourth paragraph of Article 4, imprisonment from one year to three years and a judicial fine from four hundred days to eight hundred days,

shall be sentenced.

The conduct of investigation and prosecution for the offenses defined in this paragraph depends on a written application being made to the Chief Public Prosecutor's Office by the Banking Regulation and Supervision Agency upon the application of the Bank or after obtaining its opinion. In this case, the provisions of Article 162 of the Banking Law shall apply.

II- a) For Bank personnel acting contrary to the first and second paragraphs of Article 35 of this Law, imprisonment from one year to three years and a judicial fine of not less than one hundred days shall be sentenced.

For Bank personnel who disclose secrets for the purpose of obtaining benefit for themselves or others, imprisonment from three years to five years and a judicial fine from one thousand days to ten thousand days shall be sentenced.

b) Bank personnel who misappropriate money or documents or deeds representing money or other goods that have been entrusted to their possession due to their duty or that they are obliged to protect and supervise, for themselves or others, shall be punished with imprisonment from six years to twelve years and a judicial fine of up to five thousand days, and shall also be sentenced to compensate the loss suffered by the Bank.

If the offense is committed with fraudulent behaviors aimed at ensuring that the misappropriation does not come to light, the perpetrator shall be given imprisonment of not less than twelve years and a judicial fine of up to twenty thousand days; however, the amount of the judicial fine cannot be less than three times the loss suffered by the Bank. Furthermore, if the resulting loss is not paid, the court shall ex officio order its payment.

If, before the investigation begins, the misappropriated money or documents or deeds representing money or other goods are returned in kind or the loss suffered is fully compensated, two-thirds of the penalty to be imposed shall be reduced.

If, before the prosecution begins, voluntarily, the misappropriated money or documents or deeds representing money or other goods are returned in kind or the loss suffered is fully compensated, half of the penalty to be imposed shall be reduced. If this situation occurs before the judgment, one-third of the penalty to be imposed shall be reduced.

Due to the low value of the money or documents or deeds representing money or other goods that constitute the subject of the misappropriation offense, the penalty to be imposed shall be reduced from one-third to one-half.

(Amended: 2/7/2018 – Decree Law–703/ art. 151) The conduct of investigation and prosecution against Bank personnel for the offenses defined in this paragraph and for their acts during the performance of the duties specified in the Law depends on a written application being made to the Chief Public Prosecutor's Office by the Bank Council; and the conduct of investigation and prosecution against other members serving by appointment and election depends on a written application being made to the Chief Public Prosecutor's Office by the President.

III- a) For those who intentionally cause a matter that could damage the Bank's reputation or harm its fame or wealth, or who spread and publish false news in this regard, imprisonment from one year to two years and a judicial fine of not less than one hundred days shall be sentenced.

b) For real persons and the responsible persons of legal entities who do not provide the information and documents in the fourth paragraph of Article 43 of this Law correctly within the specified procedures and principles, a judicial fine from thirty days to sixty days shall be sentenced.

The conduct of investigation and prosecution for the offences defined in this paragraph shall be subject to the Presidency making a written application to the Chief Public Prosecutor's Office.

IV- (Added paragraph: 28/11/2017 – 7061/ Article 34) Judicial fines from one thousand days to two thousand days shall be imposed on natural persons and the officials and relevant persons of legal entities who fail to provide the information and documents requested by the Bank pursuant to Article 44 of this Law, who provide them contrary to the truth, or who provide them in violation of the prescribed procedures and principles.

Disciplinary penalties

ARTICLE 68/A– (Added article: 24/6/2026 – 7587/ Article 12) As a result of the disciplinary proceedings to be conducted against Bank personnel who fail to fulfil the duties specified in this Law and other legislation in the performance of banking services, or who engage in prohibited acts and situations, the disciplinary penalties specified in this article shall be applied according to the nature of the violation and the degree of severity of its consequence.

I- Warning penalty; it is the written notification to Bank personnel that they must act more carefully and diligently in their duty or conduct. The acts and situations requiring a warning penalty are listed below:

a) Showing indifference and carelessness in the complete and timely performance of orders and duties given, in the fulfilment of the procedures and principles determined by the Bank at the place of duty, and in the protection, use and maintenance of official documents, tools, equipment and the like related to the duty,

b) Making a habit of arriving late to duty or leaving duty early without permission or an acceptable excuse,

c) Leaving the place of duty during working hours without permission or an acceptable excuse,

ç) Making a habit of meeting with persons other than clients or those who come on account of duty while on duty,

d) Engaging in attitudes or behaviours incompatible with the dignity of Bank personnel,

e) Engaging in behaviours contrary to the principle of performing the duty in cooperation,

f) Performing works unrelated to their duty despite the warnings of their superiors,

g) Acting contrary to the prescribed dress and attire principles,

ğ) Failing to provide in a timely manner the information and notifications requested by the Bank or required to be provided within the framework of the legislation,

h) Making an improper application or complaint.

II- Reprimand penalty; it is the written notification to Bank personnel that they are at fault in their duty or conduct. The acts and situations requiring a reprimand penalty are listed below:

a) Acting at fault in the complete and timely performance of orders and duties given, in the fulfilment of the procedures and principles determined by the Bank at the place of duty, and in the protection, use and maintenance of official documents, tools, equipment and the like related to the duty,

b) Objecting to the orders and duties given,

c) Showing disrespect to superiors while on duty,

ç) Using or losing documents, tools, equipment and the like belonging to the Bank for the purpose of obtaining personal benefit,

d) Engaging in offensive or disrespectful behaviour towards Bank personnel and clients, disrupting the order and peace of work,

e) Engaging in behaviours outside of service of a nature that would damage the sense of reputation and trust required by the title of Bank personnel,

f) Failing to settle within its term an advance received on account of duty,

g) Spreading demeaning and false news or gossiping about Bank personnel,

ğ) Having one's wages attached in an amount exceeding twice the gross wage for the month of January of the current year, borrowing from subordinates, or showing these persons as guarantors.

III- Short-term wage deduction penalty; it is the deduction of 15% of the wage that Bank personnel are receiving for a period of 3 months. The acts and situations requiring a short-term wage deduction penalty are listed below:

a) Deliberately failing to perform the orders and duties given completely and in a timely manner,

b) Engaging in behaviours in the course of service of a nature that would damage the sense of reputation and trust required by the title of Bank personnel,

c) Failing to come to duty for one or two days without permission or an acceptable excuse,

ç) Engaging directly or indirectly in commerce, working for a wage or without pay in any business of natural and legal persons, even outside working hours,

d) Using information acquired by reason of one's duties at the Bank for personal benefit or for the benefit or detriment of third parties,

e) Participating in the auctions of State domestic borrowing instruments organised by the Bank and purchasing from the primary market,

f) Obtaining benefit by reason of one's duties, accepting gifts directly or through an intermediary from persons with whom one has a business relationship, except for gifts required by the rules of courtesy, or requesting a loan of money, obtaining a material or immaterial benefit from any source inside or outside the Bank in a manner that can be associated with one's duty at the Bank,

g) Failing to exercise the necessary care in the protection of information and secrets belonging to the Bank or to persons and institutions having a relationship with the Bank, acquired by reason of one's title and duties,

ğ) Taking documents belonging to the Bank outside the place of duty without the permission and knowledge of the relevant superior,

h) Unless assigned by the Presidency, giving information and statements or making explanations to the press, news agencies, radio or television institutions, or to persons, institutions or organisations outside the Bank in relation to the Bank and its duties, ı) Making any publication based on the confidential information and documents of the Bank, unless deemed appropriate by the Presidency; making publications based on information learned by reason of one's duties, speaking at public conferences, seminars and meetings on matters concerning banking or the Bank and relating to general economic policy,

i) Using one's powers outside the limits of one's duties, exceeding one's powers by making initiatives, statements, commitments or promises binding on the Bank,

j) Failing to return official documents, tools, equipment and the like related to the duty despite the termination of the duty or the request of the Bank,

k) Leaving one's duty without completing the handover and delivery works one is obliged to perform,

l) Failing to comply with the general rules of morality at the place of duty, engaging in indecent behaviour.

IV- Long-term wage deduction penalty; it is the deduction of 30% of the wage that Bank personnel are receiving for a period of 6 months. The acts and situations requiring a long-term wage deduction penalty are listed below:

a) Deliberately failing to perform the orders and duties given,

b) Failing to come to duty continuously for 3 - 9 days without permission or an acceptable excuse,

c) Coming to duty drunk, drinking alcoholic beverages at the place of duty,

ç) Swearing at bank personnel or business owners, engaging in or uttering demeaning actions or words, openly threatening the aforementioned persons; sending profane, threatening and demeaning words in writing or by electronic means,

d) Making false statements in the information and documents requested by the Bank or required to be provided within the framework of legislation, or deliberately failing to notify changes that occur in a timely manner,

e) Hiding, falsifying or destroying an official document or file with the aim of putting bank personnel in a difficult situation or covering up one's own fault,

f) Failing to start duty without an acceptable excuse, despite being notified that one must return to duty immediately for various reasons by the Bank during the period of leave,

g) Issuing false reports or documents,

ğ) Engaging in deliberate and systematic pressure, insult and threatening practices against bank personnel, performing acts such as belittling, demeaning, excluding, damaging personality and dignity, intimidation, issuing unfounded documents about bank personnel,

h) Discriminating on grounds of race, language, gender, political opinion, philosophical belief, religion and sect, disability and similar reasons while performing one's duty, engaging in behaviors targeting the benefit or harm of persons,

ı) Actually engaging in activity for the benefit or detriment of any political party.

V- The penalty of termination of employment is the severance of the bank personnel's relationship with the Bank such that they shall never be appointed to any position in the Bank again. The acts and situations requiring the penalty of termination of employment are listed below:

a) Except in cases authorized by the Presidency, disclosing, giving to others or using for one's own benefit information and documents that must remain confidential in terms of the Bank and public interest in the taking of economic decisions,

b) Engaging in dishonorable and shameful acts of a nature and degree incompatible with the status of bank personnel,

c) Failing to perform duties or orders given by superiors on matters relating to war, state of emergency or general disasters,

ç) Even if the periods specified in Article 53 of the Turkish Penal Code dated 26/9/2004 and numbered 5237 have passed or been pardoned or suspended, except for penalties converted to alternative sanctions to short-term imprisonment, being sentenced under Article 223 of the Criminal Procedure Code dated 4/12/2004 and numbered 5271 for a deliberately committed offense punishable by imprisonment of one year or more, for offenses requiring imprisonment under this Law and the provisions of the Individual Pension Savings and Investment System Law dated 28/3/2001 and numbered 4632, the Banking Law dated 19/10/2005 and numbered 5411, the Insurance Law dated 3/6/2007 and numbered 5684, the Financial Leasing, Factoring, Financing and Savings Financing Companies Law dated 21/11/2012 and numbered 6361, the Capital Markets Law dated 6/12/2012 and numbered 6362, the Law on Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions dated 20/6/2013 and numbered 6493, and the Law on the Prevention of Financing of the Proliferation of Weapons of Mass Destruction dated 27/12/2020 and numbered 7262, or under Law No. 5237 or other laws for offenses of embezzlement, extortion, bribery, theft, fraud, forgery, breach of trust, fraudulent bankruptcy, rigging a tender, rigging the performance of an obligation, disclosure of information and documents of the nature of commercial secret, banking secret or customer secret, usury, laundering of assets derived from crime, financing of terrorism, smuggling offenses, or offenses against the sovereignty emblems of the State and the dignity of its organs, offenses against the security of the State, offenses against the constitutional order and the functioning of this order, offenses against national defense, offenses against State secrets and espionage, offenses against relations with foreign states, offenses against public trust, offenses in the field of informatics and tax evasion offenses, or for participation in these offenses,

d) Engaging in actual assault against bank personnel or business owners,

e) Failing to come to duty for a total of 20 days within one year without permission or an acceptable excuse,

f) Printing, reproducing, distributing or hanging or displaying in any place of the Bank any kind of prohibited publication or political or ideological purpose statements, posters, banners, tapes and the like,

g) Disrupting the peace, tranquility and working order of the Bank for ideological or political purposes, participating in actions such as boycott, occupation, preventing the execution of public services, slowing down work and strikes, or failing to come to duty collectively for these purposes, provoking and encouraging these or providing assistance,

ğ) It being subsequently understood that one falsified the documents requested at the time of entry into employment or made misleading and false statements on a matter of a nature preventing one's entry into employment,

h) Making false statements that touch the honor and chastity of bank personnel or making unfounded notifications and complaints that damage honor and dignity with the intent to tarnish these persons,

ı) Becoming a member of political parties,

i) Engaging in acts contrary to the Law on Crimes Committed Against Atatürk dated 25/7/1951 and numbered 5816,

j) Accessing the Bank's information systems without authorization and seizing, using, reproducing, destroying, altering programs, data or any other element,

deleting, placing into the system, preventing access to data in the system, preventing the operation of the system or causing it to operate incorrectly,

k) Being in unity of action with terrorist organizations, assisting these organizations, using or having used the Bank's facilities and resources to support these organizations, making propaganda for these organizations.

Those who engage in acts similar in nature and gravity to the acts and situations listed above that require the imposition of a disciplinary penalty shall also be given disciplinary penalties of the same type.

In disciplinary penalties to be imposed on personnel who have shown positive attitude, behavior and work during their past service, taking into consideration the nature of the act and situation, a penalty one degree lighter may be applied.

In case of repetition of an act or situation that has caused a disciplinary penalty within the period for deletion of penalties from the personnel file, a penalty one degree heavier shall be applied. In the third application of disciplinary penalties imposed for separate acts or situations requiring the same degree of penalty, a penalty one degree heavier shall be imposed.

This article and Article 68/B of this Law shall also be applied to contracted personnel.

Other provisions regarding disciplinary proceedings and suspension from duty

ARTICLE 68/B– (Additional article: 24/6/2026 –7587/ Article 13)

I- Disciplinary investigation and right of defense:

a) The disciplinary investigation shall be conducted by Bank inspection staff.

b) The fact that a criminal investigation or prosecution has been initiated against Bank personnel shall not prevent the conduct of a disciplinary investigation and the imposition of a disciplinary penalty for the same incident.

c) No disciplinary penalty may be imposed on Bank personnel without taking their defense. Bank personnel who fail to submit their defense within seven days without a justifiable excuse shall be deemed to have waived their right of defense.

II- Imposition of disciplinary penalties:

a) Disciplinary penalties shall be imposed by the Disciplinary Board. For the penalty of termination of employment, the approval of the body authorized to appoint Bank personnel shall also be required.

b) The Disciplinary Board and the body authorized to appoint shall render their decision based on the investigation file within 30 days from the date the file is submitted to them.

III- Application of disciplinary penalties and objection:

a) Disciplinary penalties shall take effect from the date they are imposed and shall be applied immediately. Deductions to be made within the scope of short-term salary deduction and long-term salary deduction penalties shall be applied starting from the beginning of the month following the date of the Disciplinary Board's decision.

b) The conviction or non-conviction of Bank personnel shall not prevent the application of the disciplinary penalty.

c) The fact that an act is subject to an administrative sanction under other laws shall not prevent the imposition of a disciplinary penalty for the same act under this Law.

ç) An objection may be filed against warning, reprimand, short-term salary deduction and long-term salary deduction penalties within seven days from the notification of the Disciplinary Board's decision to the relevant person. Objection applications shall be made to the unit responsible for conducting disciplinary proceedings

for consideration by the body authorized to appoint in its capacity as the High Disciplinary Board. Disciplinary penalties that are not objected to within the prescribed period shall become final.

d) The body authorized to appoint in its capacity as the High Disciplinary Board may, within 30 days from the date the file is submitted to it, decide to reject the objection or to send the file back to the Disciplinary Board for re-examination. The Disciplinary Board to which the file is sent may decide to mitigate or lift the penalty within 30 days. Decisions rendered upon objection shall be final. Recourse to administrative jurisdiction may be sought against disciplinary penalties.

IV- Statute of limitations, recording and deletion of disciplinary penalties:

a) For those who commit the acts and situations listed in Article 68/A of this Law, starting from the date the unit responsible for conducting disciplinary proceedings becomes aware that these acts and situations were committed;

1) Within one month for warning, reprimand, short-term salary deduction and long-term salary deduction penalties,

2) Within six months for the penalty of termination of employment,

if a disciplinary investigation is not initiated, the authority to impose a disciplinary penalty shall be time-barred.

If a disciplinary penalty is not imposed within at most two years from the date the acts and situations requiring a disciplinary penalty were committed, the authority to impose a disciplinary penalty shall be time-barred. However, in cases where a disciplinary penalty is to be imposed due to an act for which the criminal procedure process is ongoing, the statute of limitations period shall start from the date the court decision becomes final.

b) In the event that a disciplinary penalty is annulled by a judicial decision, a new disciplinary penalty may be established, taking into account the reasoning of the decision, within the remaining disciplinary penalty statute of limitations period from the date the decision reaches the Bank, or, if the statute of limitations period has expired or less than three months remain, within three months at the latest.

c) Disciplinary penalties shall be recorded in the personnel file of Bank personnel.

ç) Bank personnel may, after five years from the application of warning and reprimand penalties, and after ten years from the application of short-term salary deduction and long-term salary deduction penalties, request in writing from the unit responsible for conducting disciplinary proceedings the deletion of disciplinary penalties from their personnel file. If the conduct of the Bank personnel during these periods is deemed to justify the request, a decision shall be made to fulfill the request and this decision shall be recorded in the personnel file.

V- Suspension from duty:

a) A precautionary decision of suspension from duty may be taken for Bank personnel who are subject to a criminal investigation or prosecution, for whom a detention or arrest decision has been taken, or who are deemed unsuitable to remain in their duties during a disciplinary investigation.

b) The decision of suspension from duty shall be taken by the bodies authorized to appoint Bank personnel. If deemed necessary by Bank inspection staff during inspection and investigation, a decision of suspension from duty may also be taken by the Presidency.

c) A disciplinary investigation shall be initiated against Bank personnel suspended from duty within seven business days following this action.

ç) Suspension from duty shall continue for six months if it is related to a disciplinary investigation. Before this period expires, Bank personnel who have not been given a disciplinary penalty or who have been given a disciplinary penalty other than termination of employment shall be reinstated upon the finalization of these decisions.

However, if the suspension from duty is based on the existence of a criminal investigation or prosecution;

1) A decision of no grounds for prosecution or acquittal,

2) The removal of the prosecution by amnesty before judgment,

3) Being convicted of an offense, whether related to duty or not, that does not require termination of employment and the postponement of the sentence,

in such cases, these decisions may continue until they become final.

d) The Bank personnel who are removed from duty shall be paid two-thirds of their salary during the period they are not on duty. The rights and obligations of this personnel other than salary shall continue. The deductions made from the salary of the Bank personnel who are reinstated to duty during the period they were away from duty shall be refunded. However, the salaries of those who receive a penalty of termination of employment or who are convicted of a penalty requiring termination of employment, whether related to duty or not, shall not be refunded.

VI- Disciplinary superiors and their powers and responsibilities, the establishment of the Disciplinary Board, the term of office of its members, the procedure for deliberation and decision, their powers and responsibilities, and other matters relating to disciplinary proceedings shall be determined by regulation.

ADDITIONAL ARTICLE – (6/12/1984 – 3098/ Article 11)

In the Central Bank of the Republic of Turkey Law dated 14/1/1970 and numbered 1211, the terms "Minister of Finance" and "Ministry of Finance" have been changed to "Prime Minister" and "Prime Ministry".

PROVISIONAL ARTICLE 1– The Board of Directors of the Bank, from the day this Law enters into force

shall be converted into the Bank Council; the duties of the members shall continue until the end of their terms. The duty of the personnel representative member of the Board of Directors shall end on the day this Law enters into force.

PROVISIONAL ARTICLE 2– From the day this Law enters into force, the Bank General

Director shall assume the title of President (Governor) and the Bank General Director Assistants shall assume the title of President (Governor) Assistants, and their duties shall continue until the end of their terms.

PROVISIONAL ARTICLE 3– The duties of those who are auditors on the day this Law enters into force,

as members of the Bank Supervisory Board, shall continue until the end of their terms.

PROVISIONAL ARTICLE 4– The duties of other persons

who are employed at the Bank on the day this Law enters into force shall continue.

PROVISIONAL ARTICLE 5– Treasury bills existing in the Bank's portfolio on the day this Law enters into force

and the advance account against the Treasury guarantee bonds given to T. Emlak Kredi Bankası shall be liquidated between the Ministry of Finance, the Bank and the relevant institution in accordance with the principles and conditions to be determined.

PROVISIONAL ARTICLE 6– Banknotes that have been put into circulation

in accordance with Law No. 1715 on the day this Law enters into force shall remain in circulation subject to the provisions of this Law until they are replaced by a new emission.

PROVISIONAL ARTICLE 7– All decisions taken by the Bank Credits Regulation Committee on the date this Law enters into force shall continue to be effective unless a contrary decision is taken by the Bank.

PROVISIONAL ARTICLE 8– All of the shares corresponding to the increased 10 million liras of the capital, which has been increased from 15 million liras to 25 million liras by Article 5 of this Law, shall be allocated to Group (A).

The amount corresponding to the said 10 million liras of shares shall be covered in full from the provisions existing at the Bank, as of the date this Law enters into force until the first General Assembly meeting to be held.

PROVISIONAL ARTICLE 9(5)– (Additional article: 21/4/1994 – 3985/ Article 5) The amount accumulated in the advance account specified in Article 50 for 1994 and previous periods, and the amounts to be used in the 1995-1998 period, shall be liquidated in accordance with the principles to be determined between the Prime Ministry and the Bank.

PROVISIONAL ARTICLE 10– (Additional article: 13/2/2011 – 6111/ Article 162) According to the result of the oral examination-interview held between 25/8/2009 and 28/8/2009, the rights of the assistant experts appointed to the Central Bank of the Republic of Turkey whose employment was terminated outside their own request, regarding the examination result, are reserved. The training and internships of these candidates shall continue from where they left off. Within ten business days from the date this article enters into force, an application must be made to the Institution in order to benefit from the provisions of this article.

PROVISIONAL ARTICLE 11– (Additional article: 3/4/2013 – 6456/ Article 21) The members of the Supervisory Board who are in office on the date this article enters into force shall continue to perform their duties until the end of their terms of office.

PROVISIONAL ARTICLE 12– (Additional article: 17/7/2019 – 7186/ Article 6) All of the reserve funds set aside until the date this article enters into force, and all of the accumulated extraordinary reserve funds, except the portion set aside from the profit of the last year, shall be given to the Treasury without seeking a General Assembly decision.

Laws repealed

ARTICLE 69– The Law dated 2/6/1929 and numbered 1514 on the Replacement of Banknotes with Their Reserves and the T.C. Central Bank Law dated 11/6/1930 and numbered 1715, and the Laws dated 12/2/1937 numbered 3133, dated 12/6/1943 numbered 4431, dated 4/2/1948 numbered 5167, dated 8/7/1948 numbered 5256, dated 2/5/1949 numbered 5377, dated 27/4/1955 numbered 6544, dated 18/5/1955 numbered 6571, dated 25/6/1956 numbered 6758, dated 24/2/1961 numbered 260, dated 3/1/1963 numbered 142, dated 21/4/1965 numbered 583 that amend or add to this Law, and Articles 33 and 47 of the Banks Law numbered 7129; paragraph 2 of Article 9 of the Money Lending Law numbered 2279, as amended by Law numbered 302, have been repealed.

[5] In accordance with Article 6 of the Law dated 21/4/1994 and numbered 3985, the effective date of this article has been stipulated as 1/1/1995.

(Additional paragraph: 13/2/2011 – 6111/ Article 162) The provision of subparagraph (c) of Article 14 of the Law dated 12/4/1990 and numbered 3624 on the Establishment of the Small and Medium Enterprises Development and Support Administration Presidency shall not be applied to the Bank(6) .

Paragraph 3 of Article 4 of the Law dated 12 May 1964 and numbered 468(7) has been amended as follows:

The Central Bank of the Republic of Turkey shall not be considered a State Economic Enterprise and shall not be subject to the audit established by this Law. The audit of this Bank by the Grand National Assembly of Turkey shall be carried out through the examination of the national budget mentioned in Article 94 of the Constitution.

The last paragraph of Article 4 of the Law dated 12 May 1964 and numbered 468 has been amended as follows:

The administrations, institutions and professional organizations of a public institution nature written in paragraphs 1 and 2 shall be considered public legal entities within the meaning of paragraph 1.

The provisions of the laws in force that do not comply with this Law shall not be applied to the Bank.

Effective Date

ARTICLE 70 – This Law enters into force on the date of its publication.

Execution

ARTICLE 71 – The Council of Ministers executes this Law.

[6] Pursuant to subparagraph (ı) of the first paragraph of Article 215 of Law No. 6111 dated 13/2/2011, the effective date of this paragraph has been stipulated as 1/1/2012.

[7] Law No. 468 dated 12/5/1964 was repealed by Law No. 3346 dated 2/4/1987. See Article 2 of the Law No. 3346 dated 2/4/1987 on the Regulation of the Audit by the Grand National Assembly of Turkey of Public Economic Enterprises and Funds.

Provisions of Law No. 4651 dated 25/4/2001 That Could Not Be Incorporated into This Law

PROVISIONAL ARTICLE 1- The provision regarding the terms of office contained in Article 29 of Law No. 1211, as amended by Article 5 of this Law, shall not apply to the Deputy Governors (Guvernör) who are in office on the date this Law enters into force.

PROVISIONAL ARTICLE 2- The amount accumulated in the advance account specified in Article 50 of Law No. 1211, which was repealed by Article 16 of this Law, shall be liquidated in accordance with the principles to be determined between the Undersecretariat of Treasury and the Bank; the loans granted to public institutions and organizations pursuant to Article 51 shall be liquidated to be repaid under the conditions under which they were granted.

The Bank may, for a period of six months starting from the date this Law enters into force, also purchase debt instruments issued by the Treasury in the primary market.

Provision of Law No. 6009 dated 23/7/2010 That Could Not Be Incorporated into This Law

PROVISIONAL ARTICLE 2- The provision of Article 61 of the Central Bank of the Republic of Turkey Law No. 1211, as amended by this Law, shall also apply to the unrealized valuation differences arising in favor of and against the Bank as a result of the valuation of foreign currencies, banknotes, and other assets and liabilities in foreign currency and gold in the Bank's assets and liabilities due to changes in the value of the Turkish currency against foreign currencies and gold prices in international markets from 5/5/2001 until the date this Law enters into force.