Article 22/2 of Law No. 6493 authorizes the CBRT to impose an obligation on payment and electronic money institutions within the scope of the Law to hold collateral on its own. The repealed Regulation required only payment institutions providing intermediary services for invoice payment to hold a guarantee of 1 million TL at the CBRT. With the Regulation dated December 1, 2021, the scope of the guarantee obligation was expanded to cover all payment and electronic money institutions. In addition, taking into account the results of operations in the calculation of the collateral amount, base and minimum collateral obligations were implemented.
Minimum guarantee obligation
The minimum collateral obligation to be kept at the CBRT is determined in the Regulation as follows;
- Two million TL for payment institutions that exclusively provide intermediary services for bill payment,
- Three million TL for other payment institutions, excluding those that exclusively provide account information services,
- 5 million TL for electronic money institutions.
Base collateral obligation
The base guarantee obligation is determined according to the number of customers and the number of representatives. Accordingly, an additional guarantee of 500 thousand TL will be kept for each thousand representatives. For the number of customers, the calculation will be made gradually. Accordingly, the minimum guarantee obligation amount specified for the above types of establishments will be taken as the basis for up to 50 thousand customers. The guarantee obligation according to the number of customers is twice the minimum guarantee obligation stated above for companies with 50 thousand-500 thousand customers, three times the minimum guarantee obligation stated above for companies with 500 thousand-5 million customers, and above for companies with more than 5 million customers. shall be calculated as four times the minimum guarantee obligation specified. The base coverage obligation consists of the sum of the amounts calculated according to the number of customers and the number of representatives.In this calculation, the number of customers consists of the sum of the numbers found as a result of the two calculations given below.
In this calculation, the number of customers consists of the sum of the numbers found as a result of the two calculations given below.; (A+B)
- A: As of the last business day of each month, the monthly average of the number of customers who have a payment account with the organization and have made a payment transaction in the last month or have a balance of at least one hundred Turkish Liras in their account in the last calendar year
- B: As of the last business day of each month, the monthly average of the number of anonymous prepaid vehicles, which were issued by the organization and whose balance exceeded one hundred Turkish Liras at any time in the last month, in the last calendar year
In this calculation, customers that are businesses are multiplied by ten and included in the calculation.
“Payment institutions that exclusively provide account information servicesâ€, which are exempted from the minimum equity obligation, are required to take out professional liability insurance with a minimum amount of one million TL or to hold a guarantee of one million TL at the CBRT. In addition, the CBRT is authorized to increase this one million TL base amount by 50%. This one million TL amount is increased by five hundred thousand TL for every hundred thousand new customers after the first hundred thousand customers. If the payment institution, which exclusively provides account information service, uses a representative while performing its activities, it is obligatory to have an additional collateral amounting to five hundred thousand Turkish Liras for each thousand representatives it will use.
Final Collateral Liability Calculation
The Bank will calculate the total amount of collateral to be held in the relevant calendar year in January each year, taking into account the number of customers and/or representatives within the framework of the above-mentioned principles. However, in this calculation, some inputs related to the state of compliance with the legislation will also be taken into account while carrying out the activities of the organization. The base collateral obligation is increased by the CBRT, taking into account the following criteria:
- No discrepancy has been detected regarding the balances of the payment funds protection account and electronic money protection accounts.
- Timely and complete fulfillment of minimum equity and collateral obligations
- Administrative fines have not been applied, excluding the administrative fines applied from the lower limit specified in Article 27/1 of the Law.
- Customer funds have not been lost due to cyber incidents, operational errors, system errors as a result of not taking the necessary precautions by the organization
- The share of the complaints and objection applications concluded against the organization in the arbitration committees of the Union in the total applications related to the organization should not be more than ten percent
- In the framework of the Law, this Regulation and other relevant regulations, the notifications to be made to the Bank are not made on time or there are no cases of incomplete
- The ratios calculated in line with the method to be determined by the CBRT regarding the financial situation of the institution have been met.
If one of the first two of these criteria is not met, an additional 10%, if the first two are not met together, an additional 25%, and if the following criteria are not met, an additional 5% for each criterion that is not met will be calculated.
As a result, the total coverage obligation calculated in January of each year will be valid for that calendar year, and in January of the following year, the coverage amount will be recalculated for the relevant year.
Other Matters Related to Coverage
The guarantees to be held can be held as cash or government debt securities or as lease certificates issued by the Undersecretariat of Treasury Asset Leasing Company. In the event that the collateral is kept in terms of the specified securities and these securities lose at least ten percent of their market value, the institution must complete the collateral to the amount required to be held within ten working days and notify the CBRT. It is not possible to keep the collateral in foreign currency or Eurobond.
The institution will only be able to request the return of the collateral held at the CBRT for the duration of the operating permit, after fulfilling the required amount of collateral with another asset that can be accepted as collateral.
In the event that the operating license of the organization is temporarily suspended, the guarantees will continue to be held during this period.
In the event that the operating license of the organization expires, two different consequences arise. The first case covers the cases where the operating license automatically expires. These cases include the termination of the legal personality of the organization in transactions that change the legal structure of the organization such as merger or division, the termination of the legal entity of the organization according to the provisions of the Turkish Commercial Code regarding the termination of joint stock companies (Law No. 6102 art. 529, 530 and 531) and within a year, it will be longer than six months. cases of inactivity for a long time. In these cases where the operating license of the organization expires automatically, the guarantees are subject to the general provisions.
In the second case, the operating license of the organization is canceled by the CBRT in accordance with the Law. In these cases, the following conditions must be met in order for the guarantee to be released:
- Submitting to the CBRT a complete statement of the establishment, stating that the obligations under the law are fulfilled and that it does not have any financial obligations to the institutions within the scope of this Regulation, the CBRT, its customers or its representatives, together with the supporting information and documents,
- The title of the organization and the field of activity have been changed in a way that does not fall within the scope of the Law, or a decision to terminate is made,
- As a result of the audit to be carried out by the Bank, it is concluded that there are no audits, complaints, disputes or any disputes submitted to the judiciary that would prevent the release of the guarantees.
In case of audits, complaints, disputes or disputes that prevent the release of the collateral, the CBRT may decide to keep the collateral partially or completely.
Professional Liability Insurance
Professional liability insurance is an option for payment institutions that exclusively provide account information, as an alternative to the obligation to hold collateral. Other organizations are not required to take out professional liability insurance, nor do they have the option to have insurance instead of coverage.
Compliance Time
According to the provisional article 1 of the Regulation, “Organizations operating as of the date of entry into force of this Regulation shall comply with the provisions not previously included in the Regulation on Payment Services and Electronic Money Issuance and Payment Institutions and Electronic Money Institutions introduced by this Regulation and repealed in accordance with Article 84 of this Regulation. is obliged to harmonize within one year from the date of publication of this Regulation.†Accordingly, organizations operating as of 1 December have until 1 December 2022 to comply with the minimum collateral obligations.
  Av. Dr. Mehmet S. YURTÇİÇEK                               Ramazan KÜÇÜK
 Senior Consultant & Manager                           Financial Services & Risk Management Specialist