Explanation regarding the Decision on Introducing Amendments and Additions to the Regulation on Minimum Requirements for Commercial Banks' Activities in Relations with Bank Service Consumers

The Decision of the Board of the Central Bank "On Introducing Amendments and Additions to the Regulation on Minimum Requirements for Commercial Banks' Activities in Relations with Bank Service Consumers" was registered by the Ministry of Justice on January 26, 2023 under number 3030-8.

In order to ensure transparency in the use of banking services and to prevent various misunderstandings that may arise during the process of using financial services between the bank and consumers, certain amendments and additions were introduced to this document.

In particular, in order to ensure that consumers make the right choice regarding the use of various credit products and have all information about the credit, the information that must be provided to consumers about the terms related to the use of credit services before the credit contract is concluded was expanded.

In addition, in order to prevent various disputes between third parties pledging their property or acting as guarantors, the commercial bank and the debtor, and to ensure that these third parties understand that they are assuming financial obligations under the credit, collateral or guarantee contract, a requirement was introduced for the bank to provide explanations to third parties pledging their property or acting as guarantors about the risks they may face in the future.

At the same time, based on the fact that consumers are mostly confused in distinguishing the differences between subordinated debt and deposit services, the practice of banks offering subordinated debt to consumers as a deposit or deposit-equivalent debt was prohibited.

In order to ensure the transparency of the process of reviewing credit documents by banks, it was established that banks must notify the consumer no later than three days from the day such a decision was made about the decision made on granting credit or refusing to grant credit on a reasoned basis.

The amendments and additions introduced to the Regulation will come into force from April 28, 2023.