Transfer of the Bank to the SDIF

According to Article 66 of the Banking Law No 5411 (Law), if one or more of the conditions laid down in Article 67 is detected as a result of consolidated or non-consolidated supervision by the BRSA, the measures laid down in Articles 68, 69 and 70 of this Law shall be taken promptly against the relevant bank.

As a result of supervision carried out, in case of any or some of the following situations related to a bank (article 71);

1. Although the measures required to be taken within the scope of article 70 of the Banking Law are not taken wholly or partially within the period granted by the Board or in any case within twelve months, it is identified that it is not possible to strengthen its financial structure or even though these measures are taken, its financial structure cannot be strengthened,

2. It is understood that continuing to carry on business would present a danger to the rights of the beneficiaries of the deposit and participation fund, and reliability and stability of the financial system,

3. It is determined that it cannot fulfil its liabilities in time,

4. Total sum of its liabilities exceeds the total sum of its assets,

5. Its controlling shareholders or managers make directly or indirectly or fraudulently capital of bank resources in a way to endanger performance of bank or make others use fraudulently bank resources and thusly damage bank,

By the resolution by votes of at least five members of the Board in favor, the Board is authorized to revoke the operating license of bank or transfer the shareholder rights, management and supervision of the credit institution, except for the dividends, to the SDIF for the purposes of wholly take-over, sale or merger on condition that damage is deducted from the capital of the current shareholders.