Turkey passes amendment on digitalisation of Financial Agreements

Turkey

The Law Regarding the Amendments to Certain Laws and Decrees No. 7247 (Law No. 7247), which enables certain financial agreements to be executed in an electronic form and the exchange of citizen data with certain financial service providers, was published in the Official Gazette on 26 June 2020.

Sharing personal identity data

According to Article 8 of the Law No. 7247, the Turkish Ministry of Internal Affairs can share identity data, residence addresses and other address information with payment service providers, intermediary institutions, and portfolio management companies. 

Entering into financial agreements

According to Law No. 7247, certain types of financial agreements can now be entered into writing via remote communication or electronic communication, which the relevant institution (e.g. the Central Bank of Republic of Turkey, Capital Markets Board, Banking Regulation and Supervision Agency) determines as a replacement for the written form, and through which customer identity validation is possible. These financial agreements include leasing agreements, factoring agreements, agreements between finance companies and their customers, agreements between banks and their customers, agreements between card institutions (either debit or credit) and cardholders; as well as framework agreements between payment service providers and their customers. 

Remarks

The pace of the fast-moving digitalisation in the post-COVID-19 world seems to have been reflected in a way that agreements pertaining to regulated and highly scrutinised areas can now be concluded remotely without the traditional means of physical execution. After observing the relevant institutions to determine the acceptable means of executing contracts remotely, an acceleration of transactions in the Turkish finance sector may be expected.

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