Table Of ContentCommittee on Payment and
Settlement Systems
Payment systems
in Turkey
Prepared by the Central Bank of the Republic of Turkey and the
Committee on Payment and Settlement Systems of the central
banks of the Group of Ten countries
June 2007
Copies of publications are available from:
Bank for International Settlements
Press & Communications
CH-4002 Basel, Switzerland
E-mail:
Foreword
The Committee on Payment and Settlement Systems (CPSS) periodically publishes – under
the aegis of the Bank for International Settlements (BIS) – reference works on payment
systems in its member countries, widely known as Red Books. The CPSS has also invited
the central banks of a number of other countries where important developments in payment
systems are under way to prepare – in collaboration with its Secretariat at the BIS – separate
volumes on their respective payment systems. The present volume, the second edition of the
Red Book for Turkey, is a further step towards increasing our understanding of the way
payment systems work in different countries.
Properly functioning payment systems enhance the stability of the financial system, reduce
transaction costs in the economy, promote the efficient use of financial resources, improve
financial market liquidity and facilitate the conduct of monetary policy. In recent years, issues
relating to the economic efficiency and financial risks of all types of payment systems have
come to the fore.
Central banks have a strong interest in promoting safety and improving efficiency in payment
systems as part of their overall concern with financial stability. They play a key role in
domestic payment system development and, in many cases, operate large-value payment
systems. Central banks in many countries have been influential in improving public
understanding of payment and settlement arrangements in their countries and public
awareness of the various policy issues connected with such arrangements. This volume aims
to portray the significant steps taken by the Central Bank of the Republic of Turkey in
promoting safe and efficient payment systems in Turkey.
We hope that this volume will contribute to the general understanding and awareness of
payment and securities settlement arrangements in Turkey, both domestically and
internationally.
Timothy F Geithner Durmuş Yılmaz
Chairman Governor
Committee on Payment Central Bank of the
and Settlement Systems Republic of Turkey
CPSS – Payment systems in Turkey, 2007 iii
Contents
Foreword.................................................................................................................................. iii
Introduction...............................................................................................................................1
1. Institutional aspects.........................................................................................................2
1.1 The general institutional framework .......................................................................2
1.1.1 Regulatory institutions.................................................................................2
1.1.2 The legal framework for the payment and settlement systems...................3
1.1.3 The role of financial intermediaries .............................................................4
1.2 The role of the CBRT .............................................................................................6
1.2.1 General responsibilities...............................................................................7
1.2.2 Administration of accounts..........................................................................7
1.2.3 Payment systems oversight ........................................................................8
1.2.4 Activities in the area of securities clearing and settlement systems ...........8
1.2.5 The operational role of the CBRT ...............................................................9
1.2.6 Cooperation with other institutions..............................................................9
1.3 The role of other private and public sector bodies .................................................9
1.3.1 Banks Association of Turkey.......................................................................9
1.3.2 Participation Banks Association of Turkey................................................10
1.3.3 Istanbul Stock Exchange (ISE) .................................................................10
1.3.4 ISE Settlement and Custody Bank, Inc (Takasbank) ................................10
1.3.5 Central Registry Agency ...........................................................................11
2. Payment media used by non-banks ..............................................................................11
2.1 Cash payments ....................................................................................................11
2.2 Non-cash payments .............................................................................................12
2.2.1 Paper-based payments .............................................................................12
2.2.2 Cheques....................................................................................................12
2.2.3 Postal cheques .........................................................................................13
2.2.4 Promissory notes ......................................................................................13
2.2.5 Credit transfers .........................................................................................13
2.2.6 Payment cards ..........................................................................................13
2.2.7 ATMs and POS terminals .........................................................................15
2.2.8 Other access channels for banking and payments ...................................15
2.3 Recent developments ..........................................................................................15
3. Interbank exchange and settlement systems ................................................................16
3.1 General overview .................................................................................................16
3.2 The real-time gross settlement system ................................................................17
CPSS – Payment systems in Turkey, 2007 v
3.2.1 Operating rules......................................................................................... 17
3.2.2 Participants in the system ........................................................................ 17
3.2.3 Types of transactions handled ................................................................. 17
3.2.4 Operation of the system ........................................................................... 18
3.2.5 Operating hours........................................................................................ 18
3.2.6 Transaction processing environment ....................................................... 18
3.2.7 Settlement procedures ............................................................................. 19
3.2.8 Pricing policies ......................................................................................... 20
3.2.9 Risks and risk management in TIC-RTGS ............................................... 20
3.2.10 Statistical data .......................................................................................... 22
3.3 The large-value payment system ........................................................................ 22
3.3.1 Operating rules......................................................................................... 22
3.3.2 Participants in the system ........................................................................ 22
3.3.3 Types of transactions handled ................................................................. 22
3.3.4 Operation of the system ........................................................................... 22
3.3.5 Operating hours........................................................................................ 23
3.3.6 Transaction processing environment ....................................................... 23
3.3.7 Settlement procedures ............................................................................. 23
3.3.8 Pricing policies ......................................................................................... 23
3.3.9 Risk management .................................................................................... 24
3.3.10 Statistical data .......................................................................................... 24
3.4 Retail payment systems ...................................................................................... 24
3.4.1 Interbank Card Centre (BKM)................................................................... 24
3.4.2 Interbank Clearing Houses Centre (BTOM) ............................................. 25
3.4.3 E-money schemes.................................................................................... 26
3.5 Exchange and settlement systems for international transactions........................ 26
3.5.1 Cross-border payments............................................................................ 27
3.5.2 Retail payments (credit and debit cards).................................................. 27
3.5.3 Post Office remittances ............................................................................ 27
3.5.4 Traveller’s cheques .................................................................................. 27
4. Securities settlement systems ...................................................................................... 27
4.1 Government bonds, treasury bills and CBRT liquidity bills.................................. 27
4.1.1 Primary market operations ....................................................................... 28
4.1.2 The ISE market ........................................................................................ 28
4.2 Stocks.................................................................................................................. 29
4.2.1 Trading ..................................................................................................... 29
4.2.2 Clearing and Settlement........................................................................... 29
vi CPSS – Payment systems in Turkey, 2007
4.3 The use of the securities infrastructure by the CBRT ..........................................29
4.3.1 Open market operations ...........................................................................30
4.3.2 Securities lending and borrowing market in the CBRT .............................30
4.3.3 CBRT securities settlement system (TIC-ESTS) ......................................30
5. The role of the central bank in interbank settlement systems .......................................31
5.1 TIC-RTGS and ESTS...........................................................................................31
5.2 Provision of settlement (and credit) facilities........................................................32
5.2.1 Use of central bank accounts for payments ..............................................32
5.2.2 Use of central bank accounts for securities transactions ..........................32
5.3 Monetary policy and payment systems ................................................................32
5.3.1 TRY interbank money market in the CBRT...............................................32
5.3.2 Foreign exchange and banknote market in the CBRT..............................32
Statistical tables......................................................................................................................35
Comparative tables.................................................................................................................49
CPSS – Payment systems in Turkey, 2007 vii
List of abbreviations
BAT Banks Association of Turkey
BKM Interbank Card Centre
BRSA Banking Regulation and Supervision Agency
BTOM Interbank Clearing Houses Centre
CBRT Central Bank of the Republic of Turkey
CMB Capital Markets Board of Turkey
CRA Central Registration Agency
CSD Central Securities Depository
DDNs Domestic Debt Notes (government bonds and treasury bills)
DVP Delivery versus payment
ICH Interbank Clearing House
ISE Istanbul Stock Exchange
RC Relay computer (front-end processor for connecting to TIC-RTGS
and ESTS)
SDIF Savings Deposits Insurance Fund
TCA Turkish Competition Authority
TCS Takasbank Clearing System
TIC-ESTS Turkish Interbank Clearing – Electronic Securities Transfer and
Settlement System
TIC-RTGS Turkish Interbank Clearing – Real-Time Gross Settlement System
TKBB Participation Banks Association of Turkey
TRL Turkish lira (national currency unit before 1 January 2005)
TRY New Turkish lira (national currency unit since 1 January 2005)
Ykr New kurus (sub-unit of the national currency, one 100th of the new
Turkish lira)
CPSS – Payment systems in Turkey, 2007 ix
