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Official Gazette No. 122 of 23 November 2001.
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The “Savings Deposits Insurance
Fund Law” which has received the assent of the Republican Assembly of the
Turkish Republic of Northern Cyprus at its session held on 16 November, 2001,
is hereby promulgated by the President of the Turkish Republic of Northern
Cyprus under Article 94(1) of the Constitution by publishing it in the
Official Gazette.
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No: 40/2001
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(As amended by Law No.
33/2003)
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ARRANGEMENT OF SECTIONS
OF
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SAVINGS DEPOSITS INSURANCE FUND LAW
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Section
1. Short Title
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PART ONE
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General Provisions
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Section 2. Interpretation
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Section 3. Objective
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Section 4
Ambit
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PART TWO
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Provisions Relating to the Fund and Insurance
Premiums
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Section 5. Establishment of the Fund
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Section 6. Administration and Representation of
the Fund
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Section 7. Resources of the Fund
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Section 8. Utilization of the Fund
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Section 9. Rates of Insurance and Procedures and
Principles of Collection
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Section
10. Kinds of Insurance Premiums
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Section
11. Board of Management of the Fund May Take Over Shares
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Section
12. Obligation to Provide Information and Documents
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Section
13. Method of Payments
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PART THREE
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Exemption from Tax, Dues and Charges and Penalty
Provisions
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Section
14. Exemption from Tax, Dues and Charges
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Section
15. Premiums Paid to the Fund to Count as Expenses
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Section
16. Offences and Penalties
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PART FOUR
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Provisional and Final Provisions
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Provisional
Section 1. Acts Prior to the Coming into Force of This Law
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Provisional
Section 2. Resources of the Fund Prior to the Coming into Force of This Law
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Provisional
Section 3. Insurance of Savings Deposits
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Provisional
Section 4. Saving and Savings of Employees of Banks Taken Over by the Fund
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Section
17. Repeal
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Section
18. Power of Administration
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Section
19. Coming into Force
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No: 40/2001
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(As amended by Law No.
33/2003)
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SAVINGS DEPOSITS INSURANCE FUND
LAW
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The Republican Assembly of the
Turkish Republic of Northern Cyprus enacts the following Law:
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Short Title
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1.
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This Law shall be cited as Savings Deposits Insurance Fund Law.
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PART ONE
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General Provisions
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Interpretation
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2.
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In this Law unless the context otherwise requires
“Central Bank” means the
Central Bank of the Turkish Republic of Northern Cyprus.
“Control Units” means the control units defined in the Banking Law
of the Turkish Republic of Northern Cyprus.
“Council of Ministers” means the Council of Ministers of the Turkish
Republic of Northern Cyprus.
“Fund” means the Savings Deposits Insurance Fund established by this
Law.
“Ministry” means the
Ministry responsible for Economic Affairs.
“Savings Deposits” means deposits (in accounts) opened under this name by real persons not for
commercial business transactions, and deposits held by charitable societies
established by law and/or declared by the Council of Ministers as such, and
funds (established by law).
Provided that drawing cheques on savings deposit current accounts is not
deemed to be a commercial business transaction.
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Objective
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3.
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The object of this Law is to have the savings deposited at banks
insured, and to protect all rights of savings deposit holders.
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Ambit
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4.
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Banks operating subject to the Banking Law of the Turkish Republic
of Northern Cyprus are obliged to insure savings deposits held by them, in
accordance with the provisions of this Law..
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PART TWO
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Provisions Relating to the Fund
and Insurance Premiums
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Establishment of the Fund
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5.
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By this Law is established within the structure of the Central Bank
a fund which shall be a corporate body to be called Savings Deposits
Insurance Fund.
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Administration and Representation of the Fund
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6.
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The Fund shall be administered and represented by its Board of
Management. The Board of Management of the Fund shall consist of six
members and shall be composed of the Governor of the Central Bank, two Vice
Governors of the Central Bank, two representatives of the Ministry and one
representative of the North Cyprus Banks Association. The Governor of the
Central Bank shall be the Chairman of the Board of Management and shall
preside over the meetings. In the absence of the Governor of the Central
Bank, Vice Governor of the Central Bank shall preside over the meetings.
The remuneration to be paid to the representatives for the management and
representation of the Fund shall be determined by the Council of Ministers.
The Board of Management
of the Fund may be called to meet every other two month and at the request
of the Chairman or of at least three members. A simple majority of members
shall constitute the quorum at any meeting, and decisions shall be taken by
a simple majority of members. The membership of the representative of the
North Cyprus Bankers Association shall lapse in case his Bank is turned
over to the Fund, as from the time of its turning over.
The duties, powers, the method and principles guiding the
proceedings of the Fund Management shall be laid down in Regulations to be
made by the Central Bank and approved by the Council of Ministers and
published in the Official Gazette.
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Resources of the Fund
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7.
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(1)
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Resources of the Fund are comprised of the following:
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(A)
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Insurance premiums;
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(B)
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Deposits, pledges and credits expiring because of limitation of
time;
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(C)
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Advances to be made from the budget;
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(Ç)
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Surcharges on late payments by banks of legal cash reserves.
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(D)
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Aids to be secured for this purpose from Turkey and other countries;
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(E)
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Penalties to be recovered from Banks under the Banking Law of the
Turkish Republic of Northern Cyprus. and
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(F)
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Income accruing on the assets of the Fund and other incomes.
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(2)
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In extraordinary circumstances the Fund may borrow money with prior
permission of the Council of Ministers.
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Utilization of the Fund
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8.
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(1)
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The Board of Management shall cause the assets of the fund to be appreciated in value at the Central
Bank.
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(2)
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Resources of the fund may be utilized for the purposes of sections
37 and 38 of the Banking Law of the Turkish Republic of Northern Cyprus.
Provided that under no circumstances shall the funds of the Fund be
utilized otherwise than for banking purposes.
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Rates of Insurance and Procedures and Principles of Collection
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9.
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(1)
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All savings deposits deposited at banks are covered by the insurance
of the Fund. Provided that as from 01.01.2004 the amount of savings
deposits to be covered by the insurance of the Fund may be fixed by the
Central Bank, such amounts not being less than € 20,000.- (twenty thousand
Euros) for each account.
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(2)
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Insurance premiums payable on savings deposits covered by the
insurance of the Fund, the dates for their collection and the method and
principles regulating their payment, shall be prescribed by regulations to
be issued by the Central Bank and published in the Official Gazette.
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48/1977
28/1985
31/1988
23/1997
54/1999
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(3)
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Insurance premiums on savings deposits are calculated on the basis
of abstracts in quarterly returns prepared by banks in accordance with
section 33 of the Banking Law of the Turkish Republic of Northern Cyprus.
The premium rate applied is %00.25 on the total savings deposits as at each
quarterly period. Premium rates %100 over or under this rate may be
introduced at the proposal of the Central Bank and by approval of the
Council of Ministers. A surcharge under the provisions of the Procedure for
the Recovery of Public Debts Law is payable on premiums not paid when due.
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(4)
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Savings deposits in a bank, belonging to partners holding more than
%10 (ten percent) of the capital of that bank, and to the chairman and
members of its Board of Directors,
General Manager and Assistant General Managers, internal and external
auditors and the parents, spouses and children of the aforesaid persons,
are not covered by the insurance of the Fund.
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Kinds of Insurance Premiums
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10.
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Insurance premiums on Turkish Lira savings deposits are paid in
Turkish Liras, and on foreign currency savings deposits in US Dollars,
Sterling, German Mark, and Euro, and on other kinds of foreign currency
deposits in equivalent US Dollars.
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Board of Management of the Fund May Take Over Shares
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11.
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(1)
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Where it is established by control units that the financial
structure of a bank has weakened and the bank has been subjected by the
Central Bank to the provisions of section 37 or 38 of the Banking Law of
the Turkish Republic of Northern Cyprus, the shares of such bank, and the
management and control of banks whose licences to carry out the business of
banking and accept deposits have been revoked, are taken over by the Board
of Management of the Fund; and in such a case the Board of Management of
the Fund becomes entitled to exercise the powers vested for this purpose in
the Banking Law of the Turkish Republic of Northern Cyprus. Notwithstanding
any provision to the contrary in any other law, all execution and
bankruptcy proceedings, including injunctive proceedings, against a bank
whose shares have devolved upon the Fund under section 37 or 38 of the
Banking Law of the Turkish Republic of Northern Cyprus, become
discontinued.
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(2)
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Where it considers desirable for the purposes of recovering debts
due to it, the Fund shall have power to take over from a bank whose shares
have devolved partly or wholly to the Fund, the partnership rights,
excluding rights for dividends, of its subsidiaries and of other bodies to
which the bank has subscribed and which were managed and controlled by such
bank, and the management and control of the aforesaid subsidiaries and
other bodies. For the same purposes the Fund shall have power to take over
the partnership rights, excluding rights for dividends, held by corporate
partners which directly or indirectly, or either alone or together managed
and controlled such bank; and the partnership rights, excluding rights for
dividends, of companies the management and control of which are held
directly or indirectly, alone or together by the partners of such bank,
irrespective of whether such partners are real persons or corporate bodies;
or to appoint members to their boards of management and control, and to
their boards of directors either by increasing the number of their members
or by removing from their office all or some of the existing members
irrespective of whether such members are holders of privileged shares or
not. The provisions of this section shall only be applied where it is
established that the partners directly or indirectly managing and
controlling the bank, either alone or together, have utilized the resources
of the bank to their own advantage jeopardising the safe running of the
bank by exposing it to risks, or where loss has thus been caused to the
bank as a result of such conduct.
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48/1977
28/1985
31/1988
31/1991
23/1997
54/1999
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(3)
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Where the partners or administrators of a bank holding directly or
indirectly and whether alone or together the management and control of a
bank whose shares have been wholly or partly devolved upon the Fund, have,
through its board of directors, credit committees, branches, other
officials or officers or by other means, by pledging or giving as security resources and assets of the bank
directly or to third parties, or by providing loans to financially unsound
persons, or by giving loans in order to obtain loans in return, or by
securing the opening of deposit accounts or other accounts by other names
in banks within or outside the country, or by presenting such accounts as
security and by using them in other ways or by other indirect means,
acquired for themselves or have
caused third parties to acquire moneys, goods, property, any kinds of
rights and loans in the acquisition of which the resources and assets of
the bank have been utilized giving rise to debts owing to the bank, then
such debts shall be deemed to be debts owing to the Fund, Such debts shall
be recoverable under The Law of Procedures for the Recovery of Public Debts.
The Fund shall be entitled and is authorised to obtain injunction orders
against, and take under its protection, such moneys, goods, property, any
kinds of rights and loans, and to acquire them as a set off against debts
due to it and/or against losses of such banks that have been undertaken by
the Fund. A surcharge is applicable to such debts under section 44 of the
Law of Procedures for the Recovery of Public Debts as from the date of the
wrongful act giving rise to such losses and/or debts.
Subsection (2) and the
power bestowed in this section may be invoked also after the sale, transfer
or devolution of the shares of the bank to third parties.
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(4)
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Without prejudice to powers vested under subsection 6(B) of section
37 of the Banking Law of the Turkish Republic of Northern Cyprus, the rules
of the Procedure for the Recovery of Public Debts Law shall be applied in
the prosecution and recovery of debts owing to the Fund by the partners who
directly or indirectly and whether alone or together hold the management
and control of banks whose resources and all kinds of debts and shares,
wholly or partly, have devolved upon the Fund; and of debts owing by
companies and subsidiaries and other associated bodies managed and
controlled by such partners directly
or indirectly and whether alone or together with others; and of debts owing
by members of the management boards, general managers and their assistants,
chairmen and members of credit committees, officers subduing the bank by
their signatures, and debts from their spouses and children; and of debts
undertaken by the Fund owed by such
persons to other banks whose shares have devolved upon the Fund, and of
debts undertaken by the Fund owing by persons described in subsection (3)
of this section, where such debts have been taken on by the Fund. The Fund
shall commence the prosecution for the recovery of debts undertaken by it,
taking into account the total amount of debts, as shown in the books,
records and documents of the bank, made up of capital, all kinds of
interest, commission and other expenses accruing as at the date on which
the obligation for such debts were undertaken Such debts qualify as public debts as from the date on which
they are undertaken by the Fund, and become payable by the addition of a
surcharge at the rate provided in section 44 of the Procedure for the
Recovery of Public Debts Law.
Provided that the Fund
may continue, starting from where they were discontinued, the prosecution of lawsuits against the debtors
seeking execution or bankruptcy orders in connection with all kinds of
debts and debts undertaken by it, or, may as well decide to discontinue
and/or dispense with the prosecution of such lawsuits, and continue,
starting from where they were discontinued, the prosecution and recovery of
debts undertaken by it under the provisions of the Procedure for the
Recovery of Public Debts Law.
Dispensing with the
prosecution of lawsuits referred to in the preceding paragraph shall not
affect or prejudice any rights of the Fund. The provisions of the Procedure
for the Recovery of Public Debts Law may be invoked for realizing all kinds
of securities for debts which the Fund has decided to prosecute under the
said Law. The Fund, in its application of the provisions of the Procedure for
the Recovery of Public Debts Law, shall exercise all powers vested by the
said Law in the department, or other authorities, and commissions in charge
of collections under the Ministry responsible for financial matters. The
Fund shall have power, without being subject to any limitation or
restriction whatsoever, to deal with and take any kind of action with
regard to debts undertaken by it including allowing discounts thereon, or
to reach amicable settlements, or to take over any movable or immovable property
and all kinds of rights and debts as a set off for debts undertaken by
it.
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Obligation to Provide Information and Documents
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12.
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Except in circumstances relating to the security of the State, and
where serious consequences may ensue affecting the fundamental foreign
interests of the State, and without
prejudice to the rules relating to the rights for professional secrecy,
privacy of the family life and the right of defence, public bodies and
institutions and real persons and corporate bodies are obliged,
notwithstanding any prohibitive or restrictive provisions contained in any
specific law, to provide continuously or in an isolated case, at
appropriate periods and in due manner all kinds of information requested by
the Fund, even though such information may be classified as secret, and to
produce books and documents to be demanded; provided that the obligation to
supply such information and documents shall be limited to transactions
within the purview of this Law.
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Method of Payments
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13.
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The method and conditions of payments shall be governed by
regulations to be made by the Board of Management of the Fund with the
approval of the Council of Ministers and to be published in the Official
Gazette, having due regard to the cash position of the Fund and its
capacity for payment.
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PART THREE
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Exemption from Tax, Dues and
Charges, and Penalty Provisions
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Exemption from Tax, Dues and Charges
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14.
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Notwithstanding any provision to the contrary in any other law, the
Fund is exempt from the payment of any kind of taxes, dues and charges.
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Premiums Paid to the Fund to Count as Expenses
41/1976
24/1977
62/1977
11/1980
35/1983
36/1987
70/1993
38/2003
10/2004
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15.
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For the purposes of the Corporation Tax Law, premiums paid to the Fund
by banks, shall be treated as expenses in the calculation of the basis of
Corporation Tax.
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Offences and Penalties
66/1999
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16.
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Any person contravening the provisions of this Law or regulations,
rules or notifications made under this Law shall be guilty of an offence
and may, on conviction be liable to a fine up to 50,000,000,000 TL (fifty
billion Turkish Liras) or to imprisonment up to seven years or to both. The
amount of the fine mentioned in this section shall be increased as of January
in each year according to the revaluation multiplicand .to be laid down
under sections 5 and 6 of the Revaluation of the Capitals and Economic
Assets of Businesses Law.
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PART FOUR
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Provisional and Final Provisions
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Provisional Section
Acts Prior to the Coming into Force of this Law
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1.
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Savings deposits belonging to real persons, and to cooperative
societies carrying on the business of banking as bankers using the title
“bank” and to the Provident Fund, held in banks the management of which
were taken over prior to the coming into force of this Law, are covered by
the insurance of the Fund.
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Provisional Section
Resources of the Fund Prior to the Coming into force of this Law
21/2000
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2.
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The accumulated resources of the Fund established under the Savings
Deposits Insurance Fund Law now repealed by this Law, shall be transferred
to the Fund established under this Law.
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Provisional Section
Insurance of Savings Deposits
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3.
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Starting from the date of coming into force of this Law, savings
deposits shall be insured subject to the new definition given to savings
deposits. Provided that implementations prior to the coming into force of
this Law are deemed to be covered by the Savings Deposits Insurance Fund
Law.
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Provisional Section
Saving, and Savings Deposits
of Employees of Banks Taken Over by the Fund
21/2000
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4.
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(1)
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Savings deposits in banks liquidated under the provisional section 1
of the Savings Deposits Insurance Fund Law repealed by this Law, are wholly
under the cover of the Savings Deposits Insurance Fund as provided in that
Law.
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2(1).33/2003
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(2)
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Savings deposits belonging to Assistant Managers and more junior
bank employees, and to their spouses and children, and to the parents and
adult children of members of boards of directors and internal and external
auditors, which were covered by the Fund by virtue of the Savings Insurance
Fund Law No. 74/1991 but were excluded from the protection of the Fund by
Law No. 21/2000, shall be deemed to be covered by the Fund and shall be
subject to the provisions of Law No. 21/2000, so long as no court judgments
are given against such persons for causing the insolvency and liquidation
of the bank attributable to their decisions and conduct, and so long as no
decision is taken for their exclusion from the protection of the Fund.
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2(2).33/2003
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(3)
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Of persons acting as members of the committee of management
representing depositors whose savings deposits as well as those of their
spouses, parents, and children have been excluded by this Law from the protection
of the Fund, the deposits of only those
members of the management committee who act as representatives
of the excluded depositors, and
those of their spouses, parents and children shall be deemed to be covered
by the Fund and to be subject to the provisions of this Law so long as no
court judgments are given against such persons for causing the insolvency
and liquidation of the bank attributable to decisions taken by them in
contravention of legislation in force, and so long as no decision is taken
for their exclusion from the protection of the Fund.
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Repeal
21/2000
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17.
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The Savings Deposits Insurance Fund Law is repealed as from the date
of coming into force of this Law.
Provided that the
provisions of Regulations made prior to the coming into force of this Law
which do not contravene the provisions of this Law shall continue to be in
force.
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Power to Administer
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18.
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This Law shall be administered by the Minister responsible for
Economic Affairs
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Coming into Force
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19.
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This Law shall come into force as from the date of its publication
in the Official Gazette.
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