CENTRAL BANK OF THE REPUBLIC OF TURKEY

Transcription

1 CENTRAL BANK OF THE REPUBLIC OF TURKEY PAYMENT SYSTEMS IN TURKEY MUHAMMED İSLAMİ ÖNAL CHIEF SECOND MEETING OF TURKISH-RUSSIAN WORKING GROUP ON BANKING AND FINANCIAL COOPERATION Moscow, September, 2011

2 PAYMENT SYSTEMS IN TURKEY In Turkey, the major interbank payment systems are those related to stock exchange payments, check clearing and credit card payments, and other large-value interbank payments, and include: TIC-RTGS: the RTGS system of the CBRT TCS: the Takasbank clearing system BTOM: the system of the Interbank Clearing Houses Centre BKM: the Interbank Card Centre system 1

3 PAYMENT SYSTEMS IN TURKEY 2

4 REAL TIME GROSS SETTLEMENT SYSTEM (RTGS) TIC-RTGS: Electronic interbank funds transfer and real time gross settlement of Turkish Lira payments are realized since Owned and operated by the Central Bank of the Republic of Turkey. Started to operate on April Second generation of TIC-RTGS, which includes technological innovations and linkage to TIC-ESTS (Electronic Securities Transfer System), started to operate in System has 48 participants all of which are domestic banks. 3

5 Value of Transactions in TIC-RTGS Daily peak: billions (TL billions) Daily averages 2010: 40.0 billions (TL 99.7 billions) 2009: 43.3 billions (TL 93.7 billions) 2008: 45.8 billions (TL 87.3 billions) 2007: 40.1 billions (TL 71.5 billions) (Trillion EUR)

6 Volume of Transactions in TIC-RTGS Daily peak: 1,094,739 messages (1,091,786 payments) Daily averages 2010: messages 2009: 514,187 messages Million messages : 478,662 messages 2007: 425,517 messages

7 BTOM-INTERBANK CLEARING HOUSES CENTER The Cheque Law defines the Interbank Clearing Houses Center (BTOM) as a legal entity and empowers the CBRT to supervise and control the cheque clearing process nationwide. The Cheque Law and the CBRT s regulation on the BTOM govern the establishment and functioning of the interbank clearing houses (ICHs). All cheque-clearing transactions are carried out electronically in the BTOM. The BTOM determines the net debit or credit positions for each bank on a multilateral basis. The CBRT maintains a separate settlement account for the BTOM at its Ankara Branch. The final settlement of operations is carried out through this account. The BTOM is overseen by CBRT. 6

8 TCS-TAKASBANK CLEARING SYSTEM TCS clears and settles payments related to securities trades on the ISE TCS is the clearing house for Istanbul Stock Exchange (ISE). Both cash and securities settlement are handled by the TCS. TCS also acts as the central counterparty for Turkis Derivatives Exchange (TURKDEX) which started its operations in TCS is overseen by the Banking Regulation and Supervision Agency (BRSA) and Capital Market Board (CMB). 7

9 BKM-INTERBANK CARD CENTER The Interbank Card Center (BKM) was founded as a non-profit organisation by 13 major public and private Turkish banks in As of December 2010 it has 27 members (10 shareholders) and six service providers. The BKM is the service provider handling all activities related to the processing of credit card and debit card payments. It clears and settles all domestic credit card and debit card payments between banks. The BKM has a separate settlement account with the CBRT Istanbul Branch under a special agreement. This account is used exclusively for credit and debit card settlement. The BKM is overseen by BRSA. 8

10 Number of POS and ATM devices Number of POS and ATM devices thousands POS ATM thousands As of 2010 #ATM=27,649 As of 2010 #POS=1,823 million

11 Number of credit and debit cards 70 millions Credit cards Debit cards As of 2010 #Credit Cards = 47,0 million #Debit Cards = 69,9 million 10

12 Credit card & Check payments millions Number of card payments Number of check payments As of 2010 Credit Card Payments Volume 2.0 Billion Check Payments Volume 18.7 Million As of 2010 USD billions Credit Card Payments Value (domestic shopping with Domestic cards) USD 155 Billion Check Payments Value USD 152 Billion Value of card payments Value of check payments 11

13 LEGAL FRAMEWORK In Turkey there is no specific law for payment and settlement systems. Article 4, I/f of Law No on the Central Bank of the Republic of Turkey (CBRT) regulate the volume and circulation of Turkish Lira, to establish payment, securities transfer and settlement systems, to set forth regulations to ensure the uninterrupted operation and oversight of the existing or future systems, to determine the methods and instruments, including electronic environment for payments 12

14 LEGAL FRAMEWORK On the other hand, a number of laws have a bearing on payment related activities and institutions. These are; The Cheque Law The Bank Cards and Credit Cards Law The Capital Markets Law TIC-RTGS & ESTS Operational Rules 13

15 PAYMENT SYSTEMS OVERSIGHT According to the CBRT Law, the CBRT is responsible for the oversight of payment systems in Turkey. The Law stipulates the fundamental duties and powers of the central bank, including: to regulate the volume and circulation of the Turkish lira, to establish payment, securities transfer and settlement systems, to enact regulations to ensure the uninterrupted operation and oversight of the existing or future systems, and to determine the methods and instruments, including the electronic environment for payments. 14

16 PAYMENT SYSTEMS OVERSIGHT Consistent with the CBRT Law, the objectives and policies of the CBRT in the payment systems area are defined as follows: to make the necessary arrangements to ensure the smooth, reliable and efficient functioning of payment systems and to mitigate the possible risks involved in payment systems; to determine the appropriate tools and procedures for payments; to make the necessary arrangements to effectively apply monetary policy designed to ensure financial and monetary stability; to ensure public confidence in payment and securities transfer systems; 15

17 PAYMENT SYSTEMS OVERSIGHT Consistent with the CBRT Law, the objectives and policies of the CBRT in the payment systems area are defined as follows (Continue): to continuously monitor system compliance with the Core Principles for Systemically Important Payment Systems in order to prevent the systemic risks that can arise from payment systems; to monitor developments that can affect the effectiveness and reliability of the systems; and to coordinate its work with other supervisory authorities and system participants. 16

18 PAYMENT SYSTEMS LAW Turkey committed to enact a Payment Systems Law in the 2008 National Programme of Turkey for the adoption of the EU Acquis in order; To eliminate the absence of a specific law on payment and settlement systems, To strengthen the legal basis for payment and settlement systems in Turkey, To align the national legislation with the EU Acquis; 17

19 PAYMENT SYSTEMS LAW Strengthening the legal basis for payment and settlement systems in Turkey is aimed as well as aligning the national legislation with related EU acquis including; 2007/64/EC Directive on Payment Services, in the internal market 1998/26/EC Directive on Settlement Finality in Payment and Securities Settlement Systems, (Amended by Directive 2009/44/EC, 6 May 2009) 2009/110/EC Directive on the taking up, pursuit and prudential supervision of the business of electronic money institutions 18

20 PAYMENT SYSTEMS LAW The Law aims to regulate ; Payment systems; The terms for licensing, oversight and supervision of payment systems; Payment services and payment institutions; E-money institutions 19

21 IMF FSAP OF TURKEY International Monetary Fund (IMF) released its 2006 Financial System Stability Assessment Program of Turkey (FSAP) in November The IMF FSAP classifies two payment systems in Turkey as being systemically important, namely the Turkish Interbank Clearing - Real-Time Gross Settlement System (TIC-RTGS) and the Interbank Clearing Houses Center (BTOM) 20

22 IMF FSAP OF TURKEY Payment systems in Turkey have a sound legal basis and the country is "in observance of the great majority of the provisions of the Committee on Payment and Settlement Systems (CPSS) The Report highlights that regarding the TIC-RTGS/ ESTS systems, arrangements related to the intraday liquidity facility, queuing facilities with priorities and gridlock resolution mechanisms to reduce liquidity risk for participants are in line with international practices. It also states that the security, operational reliability and standards of emergency arrangements are high and that participation in the payment systems is fair, objective and publicly available. Moreover, the report emphasizes that the readily available system information is sufficient for use by participants to fully understand the financial, operational, and reputational risks that they will be exposed to through participation in the TIC-RTGS/ESTS. Besides, it is noted that no unsettled transaction remains at day-end and that the CBRT is not exposed to credit risk, as the intraday liquidity facility is provided by the CBRT against collateral 21

23 IMF FSAP OF TURKEY IMF states that payment system information is readily available and "sufficient for use by participants to fully understand the financial, operational, and reputational risks that they will be exposed to through participation in TIC-RTGS." Furthermore, the FSSA notes that the TIC- RTGS' liquidity-related features and functions are "sufficient to allow a participant to fully understand and mitigate its exposure to liquidity risk in an acceptable manner. " The most significant shortcoming identified by the report in the Turkish legal framework is that "the definition of payment finality is not explicitly defined in the Central Bank of the Republic of Turkey Law, which could conceivably lead to legal challenges". The IMF report however notes that the occurrence and success of such challenges is unlikely. 22

24 CENTRAL BANK OF THE REPUBLIC OF TURKEY PAYMENT SYSTEMS IN TURKEY THANK YOU!! MUHAMMED İSLAMİ ÖNAL CHIEF SECOND MEETING OF TURKISH-RUSSIAN WORKING GROUP ON BANKING AND FINANCIAL COOPERATION Moscow, September, 2011