STRUCTURE OF THE BANK

STRUCTURE OF THE BANK __________________________________________________

The organs of the Bank are as follows:

A- GENERAL ASSEMBLY OF SHAREHOLDERS

B- BOARD

C- OFFICE OF THE GOVERNOR

D- AUDITING COMMITTEE

E- EXECUTIVE COMMITTEE

F- DISCOUNT COMMITTEE OF THE HEAD OFFICE AND BRANCHES

G- HEAD OFFICE

H- BANKNOTE PRINTING PLANT

I- BRANCHES

J- REPRESENTATIVE AND LIAISON OFFICES ABROAD

A- GENERAL ASSEMBLY OF SHAREHOLDERS

The General Assembly of the Bank is composed of the shareholders who are registered in the share book of the Bank. The General Assembly convenes each year on a date indicated by the Articles of Association of the Bank. Each person owning ten shares or representing this number of shares is entitled to one vote. The Governor chairs the General Assembly.

The General Assembly has the following duties and powers:

1- to examine the annual report submitted by the Board and the report of the Auditing Committee;

2- to examine and approve the balance sheet and the income statements of the Bank;

3- to release the members of the Board and the Auditing Committee;

4- to increase the capital;

5- to amend the Articles of Association of the Bank;

6- to render a decision concerning the liquidation of the Bank.

B- BOARD

The Board is composed of the Governor and six members to be elected by the General Assembly. The Governor is the Chairman of the Board. The term of office of Board members is three years. One third of Board members is renewed every year. Members who are to leave the Board at the end of the first and second years are designated by drawing names. Members whose terms of office have terminated may be re-elected.

The duties and powers of the Board are as follows:

1- to determine the conditions for replacement of banknotes in circulation by a new issue, as well as their withdrawal from circulation and destruction when necessary;

2- to determine the rediscount, discount and interest rates, as well as the fees and commissions applicable to the transactions of the Bank;

3- to render a decision on the proposals that the Bank shall submit to the Prime Ministry in accordance with the Article 40 of the Law on the Central Bank of the Republic of Turkey, as well as on the issues set forth by the said Law;

4- to determine the terms and conditions of credits to be extended by the Bank and the limits on rediscount and advances;

5- to determine the terms and types of deposits, their maturity dates and validity periods;

6- to determine the parity of the national currency against gold and foreign currencies in accordance with Article 4;

7- to manage the gold and foreign exchange reserves within the scope of Article 4; to determine the terms and conditions of transactions to be carried out on the stock exchange in foreign exchange and precious metals;

8- to approve the annual cadres of the Bank’s personnel;

9- to approve the regulations drafted by the Executive Committee on the administration, organization and services of the Bank;

10- to take decisions on the purchase or acquisition of real property needed by the Bank, as well as on the sale when necessary of real property owned by the Bank;

11- to decide on amicable settlement, release and cancellation of the amounts and values exceeding the limits stated in regulations;

12- to prepare the annual report, balance sheet, budget and the income statements of the Bank, as well as the agenda of the General Assembly;

13- to appoint the Bank personnel whose appointments are entrusted to the Board by regulation, and to specify the authorized signatories binding the Bank;

14- to determine the quality, quantity and size of real property needed by the banks to carry out their banking activities; to grant permission to acquire real property apart from the immovables to be allocated such as office, factory, work-shop and annexes required by the objects of business of the partnerships in which banks participate with more than 10 percent of the capital, and to such partnerships and establishments in which the majority of the capital is owned by the afore mentioned partnerships.

15- to take decisions on issues subject to the approval of the Board by virtue of this Law, as well as on issues submitted by the Office of the Governor for examination and approval.

C- OFFICE OF THE GOVERNOR

Governor

The Governor is appointed for a term of five years by a decree of the Council of Ministers. The Governor may be re-appointed at the expiration of this term.

The Governor, in the capacity of the highest executive officer, administers and represents the Bank within the country and abroad.

The Governor is entrusted with the following powers:

1- to ensure the enforcement of the provisions of this Law and the decisions taken by the Board.

2- to take appropriate measures in order to carry out the duties with which the Bank is entrusted by this Law, and to make proposals to the Board on such measures whenever the Governor deems necessary.

In the temporary absence of the Governor, the Vice Governor designated by him/her, acts on his/her behalf during this period.

Vice Governors

Four Vice Governors are appointed to assist the Governor. Vice Governors are appointed by a joint decree for a period of three years. Vice Governors may be re-appointed at the expiration of the said term or may be replaced in the same manner prior to the termination of this term.

D- AUDITING COMMITTEE

The Auditing Committee supervises all the operations and accounts of the Bank. The Office of the Governor is obliged to furnish all the information and documents requested by the Auditing Committee. The Auditing Committee, having no administrative power, submits its opinions in writing to the Board and also presents a copy thereof to the Prime Ministry. The Committee submits to the General Assembly a report to be drawn up on the operations and accounts of the Bank as at the end of the year.

Members of the Auditing Committee serve for a term of two years.

Members of the Auditing Committee may not share in the profits of the Bank.

E- EXECUTIVE COMMITTEE

The Executive Committee is composed of the Vice Governors under the chairmanship of the Governor. In cases in which the Governor is unable to chair, the Vice Governor designated by him/her presides over the Executive Committee.

The duties of the Executive Committee are as follows:

1- to prepare proposals to be submitted to the Board, by examining in advance the issues subject to Board decision, when deemed appropriate by the Governor;

2- to draw up regulations on the administration, organization and services of the Bank;

3- to render decisions on issues made subject to the decision of the Executive Committee by regulation;

4- to ensure coordination in the operations of the Bank;

5- to perform such duties related to appointment, salary, dismissal and retirement of the personnel other than those appointed by the Board.

Decisions of the Executive Committee is taken by a majority of all the members. In the event of a tie, the proposal supported by the Governor shall be considered adopted.

F- THE DISCOUNT COMMITTEE OF THE HEAD OFFICE AND BRANCHES

The Discount Committee of the Head Office is composed of two members to be elected by the Board and of a related Vice Governor under the chairmanship of the Governor. The duties of this Committee are as follows:

To make proposals to the Board about the rediscount, discount and interest rates which the Bank will apply in its own transactions;

To examine and regulate the credit operations within the framework of the powers given by the Board.

The Discount Committee of the Branches is composed of the members to be designated by regulation under the chairmanship of the Director of the related branch.

G- HEAD OFFICE

The work of the Head Office of the Bank is done by 17 departments. These departments are consisted of 13 General Directorates, 2 Units, and 2 Secretariats.

Their areas of task and responsibility are described hereinbelow in alphabetical order.

ACCOUNTING DEPARTMENT

prepares and updates the accounting plan, the balance sheet and the statements of the Bank; draws up the Bank’s annual budget and follows its implementation;

keeps the books as prescribed by law, follows the smooth functioning of the accounting system and makes the necessary arrangements thereof;

prepares the reports of extra budgetary funds;

operates the electronic fund transfers via EFT, SWIFT, SAOS, EMKT systems, keeps their accounting records;

is responsible for the fulfillment of the financial obligations of the Bank;

keeps, follows and controls the accounting records of foreign exchange transactions of the Head Office;

gives instructions to the branch offices and to the banks on the related matters.

Accounting Department executes its functions in five divisions:

Turkish Lira Accounting Division

Foreign Exchange Accounting Division

Balance Sheet and Accounts Monitoring Division

Budget Division

Electronic Payments Division

BANKING DEPARTMENT

notifies the Bank’s opinion about the matters related with setting up a new bank, the abolishment of permission for banking and deposit taking activities of a bank;

sets the principles and conditions for the legal requirements; determines the ratios which the banks are obliged to observe and the maximum interest rates applicable to their banking transactions along with the terms and types of deposits;

gathers information on dishonored checks and informs the banks in this regard; executes the services of interbank clearing houses;

conducts supervision and auditing of banks and special finance institutions through on-site and off-site examinations of their operations;

submits opinions on all kinds of legal arrangements for the banking sector;

collects and processes the data relating to financial statements of banks based on the uniform chart of accounts within the context of “early warning system”; prepares warning and performance reports;

executes operations relating to foreign exchange positions of the banks, special finance institutions and authorized institutions;

collects and evaluates information on the risks and protested bills of customers of the banks through risk centralization.

The Banking Department executes its functions in four divisions:

Banks Supervision Division

Banking Transactions Division

Financial Institutions Division

Risk and Clearing Operations Division

CONSTRUCTION AND PROCUREMENT DEPARTMENT

conducts transactions related to purchasing, selling and leasing of real estate of the Bank; executes construction, renovation and installation works of the Bank’s premises;

provides services for setting up, operating and maintaining the technical equipment of the Bank;

procures the fixtures and equipment and writing materials for the use of the Bank;

conducts the operations of the “Head Office Purchasing, Selling and Tender Commission”;

carries out transportation and housekeeping services for the Bank.

Construction and Procurement Department executes its functions in four divisions:

Construction and Real Properties Division

Maintenance Division

Materials Division

Housekeeping Services Division

CONTROL UNIT

follows and controls the transactions of the branch offices to ensure that they are executed in accordance with the regulations;

follows and audits the existence and movements of the cash and in kind values in order to verify whether they correspond to the records;

notifies the illegal activities and important troubles concerning the security and works of the Bank.

The Control Unit is composed of the Head Office Control Unit, the Examination and Evaluation Committee, the Control Group and the Branches Control Group

DATA PROCESSING DEPARTMENT

is responsible for selecting the hardware and software suitable for the Bank; carries out bankwide installation of automation equipment;

makes contribution to the strategies related to data processing and automation, and develops and follows the planning;

follows the developments in the computer technology and adapts them to the Bank’s structure;

operates the EFT (Electronic Fund Transfer) System through which interbank Turkish Lira fund transfers, clearings and reconciliations are executed;

operates the Electronic Data Distribution System and develops the Bank’s Web Site;

Data Processing and Statistics Department executes its functions in five divisions:

Payment Systems Division

Systems Technical Support Division

Systems Operation Division

Application Development Division

System Research and Planning Division

FOREIGN RELATIONS DEPARTMENT

establishes institutional relations of the Bank with the international organizations; follows and reports the relations with the Customs Union and the European Union;

executes the operations of the Bank’s medium and long term external credit agreements;

monitors, on behalf of the Treasury, the foreign debts of the government and conducts their repayments; manages the disbursement of foreign credits granted to the government; acts as the advisor for the Treasury on its relations with domestic and international finance circles;

follows the developments in the world economy and international markets; prepares short and long term reports thereon;

implements the provisions of the regulation on the Protection of the Value of the Turkish Currency regarding the collection of exports proceeds and payment of imports, invisible transactions, capital movements;

implements the provisions of the regulation on exports incentives.

Foreign Relations Department executes its functions in five divisions:

European Union Relations Division

International Organizations Division

Foreign Economies Monitoring Division

Foreign Exchange Regulations Divisions

Foreign Trade Division

HUMAN RESOURCES DEPARTMENT

provides proposals to the top management for setting the Bank’s personnel policy and for its effective application;

recruits the personnel suitable to the Bank’s needs, determines their employment conditions and employs them in the organization according to their qualifications;

conducts and follows the matters of all kinds pertaining to personnel;

executes the preparatory works for determination and development of the remuneration policy;

informs the employees of the regulation pertaining to personnel, personal rights, and social security;

makes arrangements in the organization of the Bank in order to increase the productivity of operations, to cut the costs, to enhance the service quality and develops the appropriate methods to this end.

conducts job analysis, job and task descriptions and their standardization works; develops and implements the ways that set the productivity standards of the employees;

conducts analysis on the training needs of the personnel;

develops an effective training system in accordance with the Bank’s general objective and policy as well as technological, economic and social developments, conducts research in this area, prepares, implements and evaluates the training plans and programs.

Human Resources Department executes its functions in five divisions:

Personnel Management Division

Personnel Planning and Organization Division

Register and Social Security Division

Training Division

Training Planning Division

INSPECTION UNIT

inspects all operations of the Head Office, branches and representative offices abroad to ensure that they are executed in compliance with the regulations; conducts examinations and inquiries within the limits of the powers and duties granted by the Banks Act and other related laws;

conducts supervision at the banks, special finance institutions, authorized institutions and other establishments in the fields in which the duty and power of inspection are given to the Central Bank by the Banks Act and other regulations.

ISSUE DEPARTMENT

arranges the printing and circulation of the national currency;

puts the banknotes into circulation, replaces them with new issues when necessary, regulates the printing programs of banknotes and coordinates with the Banknote Printing Plant in order to produce banknotes in an uninterrupted and productive way;

determines the principles pertaining to custody, transportation, cancellation and destruction of the valuables;

determines the working conditions of the banknote processing systems;

gives notifications to the branches, the banks and the related institutions about the new foreign exchange banknotes which are put into circulation and those which are withdrawn from circulation;

conducts the custodian and transportation operations of banknotes, coins, gold coins and gold bullions;

conducts the operations concerning the banknotes withdrawn from circulation, as well as the counting, sorting, cancellation and destruction of old and worn out banknotes;

carries out the operations concerning the exhibition of securities such as banknotes, coins, gold, government papers, stocks, bonds and historical documents and properties;

issues warning to the banking system, financial system and branches about false Turkish lira and foreign exchange banknotes, conducts the examinations when requested by judiciary and administrative offices;

handles all fiscal service transactions ranging from printing and destruction of the government papers, and maintains their portfolio and provision accounts, acts as the Treasurer;

conducts the operations pertaining to the Bank’s stocks;

makes the amendments in the Terms and Conditions of the Bank in coordination with the related departments; determines the principles and conditions of the payments to be made from Turkish lira deposit accounts maintained in the Bank, as well as the remittances and collection of the bills; establishes the principles governing the interest rates, commissions and fees applicable to all kinds of banking transactions of the Bank.

follows the operations pertaining to the Treasury Account System, tax collection and the commissions and fees to be paid by the Bank; concludes the domestic correspondent banking agreements.

Issue Department executes its functions in three divisions:

Issue Division

Banknote Movements Division

Treasury and Fiscal Services Division

LEGAL DEPARTMENT

submits its legal views on the duties of the Bank to the related departments;

handles all the legal work of the Bank, including the Bank’s involvement in commercial, administrative and civil litigation, and represents the Bank in actions before judges;

participates in the preparatory works of the regulation and legal documents pertaining to the Bank, and presents its views thereupon.

The Legal Department functions as a counseling and support unit.

MARKETS DEPARTMENT

conducts operations in domestic and international foreign exchange, money, securities and in their derivative markets in order to manage foreign exchange and gold reserves of the Country in a productive manner;

conducts open market operations in order to regulate money supply and liquidity in the economy;

acts as intermediary in the interbank money market ensuring a more rational utilization of the funds, and operates, when necessary, in the name and on behalf of the Bank;

carries out the government domestic borrowing as the fiscal agent of the Treasury;

acts as intermediary in the foreign exchange and banknotes markets in order to obtain a more efficient utilization of the funds in the banking system, and operates, when necessary, in the name and on behalf of the Bank, ensuring smooth functioning of the markets;

makes arrangements in the foreign correspondent banking relationship;

the sale of government papers by “auction” and “outright sale to public” methods;

executes the implementation of the rediscount policy within the framework of development plans, annual programs and monetary policy; conducts the transactions of rediscount, discount, advance against bills, bonds and gold; determines the rediscount, discount and interest rates applicable to its own transactions;

executes the credit transactions of the Bank with the Treasury, public institutions and the banking system;

acts as the reporter of the Discount Committee of the Head Office;

determines the sources of exchange rate, interest rate, credit, liquidity and operation risks, measures these risks, sets the acceptable risk limits.

Markets Department executes its functions in seven divisions:

Money Markets Division

Credits Division

Open Market Operations Division

Treasury Operations Division

Foreign Exchange and Banknotes Division

Foreign Exchange Transactions Division

Foreign Exchange Risk Management Division

OFFICE OF THE SECRETARY GENERAL

maintains coordination among departments of the Bank, executes the duties given directly by the Governor and the Executive Committee; provides service and support to the Governor and the Vice Governors;

conducts secretarial work for the meetings of the Board, the Head Office Discount Committee and the Executive Committee;

provides service relating to public relations and protocol for the Bank; distributes information about the Bank, the monetary policy and the economy to individuals and groups within and outside the Bank by means of press releases, weekly press bulletin and other publications;

carries out all internal and external correspondence, provides records retention and archival services of the Bank;

provides library, documentation and translation services;

executes the execution works of the Bank’s Shareholders General Assembly.

The Office of the Secretary General executes its functions in one secretariat and four divisions:

Secretariat of Governor’s Office

Secretariat of the Board and the Auditing Committee Division

Correspondence Division

Library and Documentation Division

Private Offices Division

OFFICE OF THE SECRETARY FOR SECURITY AND DEFENSE

conducts and plans, in coordination with the governmental, military and other administrations, the civil defense services during peace, mobilization and wartime, and the services of the special security unit in the Head Office and branches;

prepares the regulations concerning protection and security services in the Bank.

The Office of the Secretary for Security and Defense executes its functions in one division:

Security Division

RESEARCH DEPARTMENT

conducts research and analysis on economic and financial matters;

studies and evaluates the dynamics of economic developments within the framework of econometric models to make forecasts.

coordinates the studies on the matters and measures stated in development plans and annual programs and related with the Bank;

draws up the draft of the Bank’s Annual Report.

The Research Department executes its functions in two divisions:

Economic Research Division

Financial Research Division

SOCIAL AFFAIRS DEPARTMENT

provides services related to social and medical assistance to the Bank’s personnel and their family members;

administers the training, seminar and recreational centers, and the social clubs and the guesthouse,

organizes cultural and artistic activities, encourages Bank’s personnel to take part in artistic, cultural and social activities; conducts organizations regarding business travels of the personnel.

Social Affairs Department executes its functions in five divisions:

Catering Division

Social Clubs, Training and Recreational Centers Division

Medical Assistance Division

Culture, Arts and Environment Division

Social Assistance Division

STATISTICS DEPARTMENT

collects, processes the economic and financial data; prepares financial statistical tables;

sets up data bank in coordination with the other departments of the Bank; develops data base applications;

prepares the table for balance of payments and that of foreign exchange assets and liabilities;

conducts analysis based on the balance sheets and income statements of private sector companies in order to establish sectoral profile.;

Statistics Department executes its functions in five divisions:

Economic Statistics Division

Financial Statistics Division

Banking Data Division

Balance of Payments Division

Sectoral Evaluation Division

WORKERS' REMITTANCES DEPARTMENT

opens the foreign exchange deposit accounts of the Turkish workers abroad and conducts transactions related thereto;

compiles statistical information on the foreign exchange deposit accounts, prepares evaluation reports thereof.

Workers’ Remittances Department executes its functions in four divisions:

Workers’ Remittances Division (Germany)

Workers’ Remittances Division (Other Countries)

Workers’ Problems and Evaluation Division

Control and Correspondence Division

H- BANKNOTE PRINTING PLANT DEPARTMENT

prints Turkish lira and foreign exchange banknotes, government papers, stocks, bonds, stamps, national lottery tickets etc.;

conducts printing services of the Bank, performs maintenance operations of the equipment;

keeps the accounts and records of the Plant, draws up the budget and the balance sheet of the department;

takes the necessary measures to meet the production requirements in time.

Started to print banknotes in 1957, the Banknote Printing Plant Department performs its duties according to the principles of profitability and productivity. The Banknote Printing Plant has a separate accounting plan and it is consolidated with the Bank’s accounts at the end of accounting period.

Banknote Printing Plant Department executes its functions in four divisions:

Production Division

Production Control Division

Maintenance, Repairs and Plant Division

Administrative and Financial Affairs Division

I- ORGANIZATION OF THE BRANCHES

Branches are opened in cities within the country where deemed necessary by the Board decision. The branches are composed of a branch director and one or more assistant directors and related services according to the volume and importance of the operations.

FOREIGN EXCHANGE OPERATIONS

Foreign Exchange-Banknotes Operations

They consist of purchase and selling all kinds of foreign exchange and banknotes pursuant to the Law on the Protection of the Value of the Turkish Currency; transaction related to buying and selling in the foreign exchange and banknotes markets within the Money Markets and Treasury Department, and the transactions related to foreign exchange remittances for public sector and invisible transactions.

Imports Transactions

They include the transactions related to imports made by general and annexed budget public institutions depending on their request, and the controls of import licenses related to imports transactions realized by banks. The control in question involves in admonishing of the banks in case the licenses are delivered against the regulations.

Exports Transactions

They involve in the payment and collection of exports proceeds and premiums.

The Transactions related to Promotion of Exports and Investments

The Transactions of Workers’ Remittances

They involve in maintaining the foreign exchange deposit accounts of the Turkish workers abroad and conducting transactions related thereto.

TURKISH LIRA OPERATIONS

Current Accounts and Remittances

They consist of transactions related to accounts belonging to government institutions, banks, finance institutions and funds, and to blocked accounts deposited in the Central Bank.

Securities Operations

They involve in buying and selling government papers, and transactions of the dividend payments related to the Bank’s shares.

Rediscount Operations

They consist of the transactions related to acceptance of bills and documents held in banks’ portfolio for rediscount in accordance with the Central Bank Law.

CASHIER’S OFFICE TRANSACTIONS

They consist of all kinds of collection, payment and conversion in terms of Turkish Lira and foreign currency and realization domestic and international money transfers, as well as the custody of all kinds of Turkish currency, foreign currency and other valuables.

The Central Bank of the Republic of Turkey has 21 branches in Turkey. They are in the following cities:

ADANA
ANKARA
ANTALYA
BURSA
DENİZLİ
DİYARBAKIR
EDİRNE
ERZURUM
ESKİŞEHİR
GAZİANTEP
İSKENDERUN
İSTANBUL
İZMİR
İZMİT
KAYSERİ
KONYA
MALATYA
MERSİN
SAMSUN
TRABZON
VAN

J- REPRESENTATIVE AND LIAISON OFFICES ABROAD

The Bank may open representative and liaison offices abroad. The representative offices follows and reports the economic developments, particularly the monetary, financial and banking activities of the countries in their areas. They represent the Bank abroad.

The representative and liaison offices of the Bank are as follows:

Frankfurt Representative Office

- Berlin Liaison Office

London Representative Office

New York Representative Office

Tokyo Representative Office