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PART I An Overview of the BRSA and its Activities MARCH 1, 2005 DR. SEDAT YETİM

PART I An Overview of the BRSA and its Activities MARCH 1, 2005 DR. SEDAT YETİM. About BRSA?. A public legal entity having financial and administrative autonomy Established to : Protect the rights of deposit ors Ensure banks to operate in a healthy and efficient manner

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PART I An Overview of the BRSA and its Activities MARCH 1, 2005 DR. SEDAT YETİM

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  1. PART I An Overview of the BRSA and its Activities MARCH 1, 2005 DR. SEDAT YETİM

  2. About BRSA? • A public legal entity having financial and administrative autonomy • Established to: • Protect the rights of depositors • Ensure banks to operate in a healthy and efficient manner • Ensure efficient functioning of the credit system • Has a seven-member Board(Banking Regulation and Supervision Board) as its decision-making body • The chairman of the BRSA is also the chairman of the Board. “Strong Banking Sector, Strong Economy”

  3. Personnel of the BRSA; • The BRSA has around 400 employees. • Chairman of the BRSA is also the Chairman of the Board and is appointed for 6 years by the Council of Ministers. • Members of the Board are appointed for maximum 6 years by the Council of Ministers. 2 of the Board members are replaced on a 2 year term basis. • Experienced personnel transferred from; • The Undersecretariat of the Treasury • The Central Bank of the Republic of Turkey • The State Planning Organization • The Ministry of Finance • Private Sector • Assistant auditors and specialists are appointed after anproficiency examination. “Strong Banking Sector, Strong Economy”

  4. BRSA has;-4 VPs-13 Dep’s-Advisors-SBAs “Strong Banking Sector, Strong Economy”

  5. BRSA has 2 functions: • SUPERVISION • REGULATION “Strong Banking Sector, Strong Economy”

  6. How does the BRSA supervise a bank? • Process • On-site Audit • Off-site Monitoring • Evaluation and Enforcement (Institutions Departments) • Decision-Making Mechanism “Strong Banking Sector, Strong Economy”

  7. In which conditions a bank is warned before it is taken over? (Banks Act/14-1) • Warning The bank receives a warning if the audits reveal that the bank’s operations: • violate the legislation, • are against banking principles and conventions and • jeopardize the bank’s safe functioning. • Precautions If the bank does not comply with the instructions then the Board may take the following measures: • Change the members of the board, appoint new members to the board, • Restrict its activities, • Increase deposit insurance premium or reserve requirement rates, • Other actions deemed necessary. “Strong Banking Sector, Strong Economy”

  8. In which conditions a bank is warned before it is taken over?(Banks Act /14-2) Advance-level measures In the case it is determined that; • a bank’s assets can not cover its liabilities or • it does not conform with the regulations on liquidity and capital; the Agency asks for appropriate measuressuch as; • Capital increase • Retaining of profits • Disposing of non-productive assets • Other necessary actions “Strong Banking Sector, Strong Economy”

  9. How does the BRSA make the decision to take over a bank?(Banks Act/14-4) • In order for the BRSA to take over a bank, affirming votes of at least 5 members are required. “Strong Banking Sector, Strong Economy”

  10. Why is a bank taken over? • Deteriorating financial performance of the bank (Banks Act /14 -3) • Endangering the rights of depositors and the security and stability of the financial system • Loss incurred on bank by majority shareholders (Banks Act /14 - 4) • Directly or indirectly using the bank’s funds for their own benefits “Strong Banking Sector, Strong Economy”

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