The deposit insurance system is the most developed organization established for the protection of the deposit until today. The system works based on the following mechanisms; the depositor, the bank accepting the deposit and the organization insuring the deposit. The power invested in it comes from the legal rules based on the laws of the country. The organization insuring collects premium at a certain amount against this transaction. The organization becomes a part of the activity in the event that the bank to which the deposit is entrusted cannot pay the deposit of the depositor in accordance with the provisions stated in the relevant legislation. It pays the deposit equaled to the insured amount to the depositor or depositors. It also initiates the legal action against the bank which struggles to make payment in order to recover the amounts paid.
The first legal regulation on the protection of the savings deposit in Türkiye is the Deposit Protection Law dated 05.30.1933. According to this Law, the deposit of banks in the CBRT as reserve ratio on deposits was accepted as a provision for the savings deposit accounts opened in the respective banks and it was ensured that it may not be seized by the third parties. In accordance with the Banking Law of 06.01.1936, which amended the aforesaid law afterwards, the amount equaled to 40% (this ratio was increased to 50% in 1958) of the deposit of the savings account holders in banks was accepted as the preferential creditor above the total assets of the bank accepting this deposit and it was ensured that in case of bankruptcy, this amount shall be paid to the depositors without waiting for the result of the liquidation. In addition, with the Law entering into force in 1960, the principle for gradual liquidation in banks was accepted and the Bank Liquidation Fund was established.
The Savings Deposit Insurance Fund (SDIF/Fund) was established on July 22, 1983 within the body of Central Bank of the Republic of Türkiye (CBRT) in order to insure the savings deposit. As a result of the economic crisis in 1994, the SDIF’s powers were expanded, and in addition to insuring the savings deposit, it was mandated with strengthening the financial status of banks and restructuring them when necessary.
The finance industry crossed the borders of countries in the late 90s, and began to serve in a more sophisticated and faster manner, thus calling for more specialized, better functioning, independent regulatory and supervisory organizations. The global trend of entrusting the audit task, which was previously undertaken by Central Banks and Ministries, to an independent organization made an impact on Türkiye as well, and led to the foundation of the Banking Regulation and Supervision Agency in 1999 when the SDIF’s authority and administration were transferred from the CBRT to the BRSA.
The establishment of the BRSA and the commencement of its operations coincided with the second financial crisis that broke out in Türkiye. The number of bankrupt banks, which was 4 at the first stage in 1994, increased to 25 in early 2000s when the second stage came into play. On December 26, 2003, the Fund’s Board was appointed as the decision making body of the SDIF, and took on an autonomous status.
Put into force in November, 2005, the Banking Law No. 5411 brought about major changes for the Turkish deposit insurance system and the SDIF. This law expanded SDIF’s authorities, and entrusted the SDIF with the authority to designate the coverage and limit of insured deposit specified by the BRSA in accordance with past regulations.In addition, the SDIF is authorized to determine the tariff, collection term and mode of the risk-based insurance premium. Another novelty introduced by the Banking Law No. 5411 is to put participation funds of natural persons in participation banks under the SDIF’s guarantee.
In accordance with the Decree Law (introduced as a law by the Law No.6758 of 11/10/2017) No. 674 of 09.01.2016 published within the scope of SoE declared after the coup attempt on 07.15.2016, it was decided to transfer the task and powers of trusteeship, which were possessed by the companies assigned/to be assigned with a trustee in accordance with the article 133 of the Code of Criminal Procedures, to the SDIF due to their attachment, relation or contact with the FETÖ/PDY terrorist organizations, and the Decree Law in question set out provisions concerning the sale and liquidation of the said companies and their assets.