DECISION NO: 37 Deposit and Participation System (Yuvam) Accounts for Citizens Residing Abroad

DECISION OF TKBB ADVISORY BOARD

DECISION DATE : 19.02.2022
DECISION NO : 37
DECISION SUBJECT : Deposit and Participation System (Yuvam) Accounts for Citizens Residing Abroad

REFERENCE

REQUEST DATE : 08.02.2022
REQUEST NO : E-63862138-804.01-2574
REQUEST SUBJECT : Deposit and Participation System (Yuvam) Accounts for Citizens Residing Abroad
REQUESTOR : Participation Banks Association of Türkiye

REQUEST SUMMARY:

The following provision is included in paragraph 3 of Article 4 of the Communiqué on "Deposit and Participation System (Yuvam) Accounts for Citizens Residing Abroad", published by the Central Bank of the Republic of Türkiye (CBRT) in the Official Gazette dated 01.02.2022 and numbered 31737, and the Implementing Instruction published regarding this Communiqué.

(3) The additional return calculated at the rates determined below according to the maturity groups over the foreign currency amounts converted into YUVAM accounts is paid by the Central Bank in Turkish lira under paragraph 3 of Article 6. The rates below indicate the annual return rates.

3-month Maturity: 0%

6-month Maturity: 1%

12-month Maturity: 1.50%

24-month Maturity: 2%

There is a fixed return commitment to be paid by the CBRT to customers holding money for the maturity period determined pursuant to the provision of the article in question. We present this issue to the Board for the evaluation of the compliance of certain rates of return to be paid to the account holder with the principles and standards of participation banking.

DECISION:

Customers who deposit foreign currency into participation accounts opened within the framework of the "Communiqué on Deposit and Participation System (YUVAM) Accounts for Citizens residing abroad" numbered 2022/7, published by the Central Bank in the Official Gazette dated 01.02.2022 and numbered 31737, perform the foreign currency exchange transaction with the participation bank, and establish a partnership relationship with the participation bank by depositing TRY obtained from this transaction into the said account. Afterward, the participation bank converts the foreign currency obtained from the customer to TRY by selling it to the Central Bank. In this transaction, the customer sells his/her foreign currency to the participation bank and deposits the TRY s/he has obtained in return into the YUVAM participation account at the participation bank. In this way, a partnership is established with the participation bank over this account. In this partnership established between the customer and the participation bank, the participation bank does not give any guarantee to the customer in terms of capital and profit. The exchange rate difference committed by the Central Bank for these accounts and the additional return to arise in case of fulfillment of certain conditions can be considered as a grant from a third party that is not a party to the partnership established by the customer with the participation bank. On the other hand, in its decision dated 06.01.2022 and numbered 33 on Exchange Rate Protected TRY Participation Accounts, the Advisory Board did not consider the payment of the difference between profit and exchange rate by the Central Bank, which is considered as a third party by the Board, as interest. Assuming the Bank to be a third party, it is considered that there is no difference between the Central Bank's commitment for the loss of return arising from the exchange rate, taking into account the public interest, and its commitment for an additional return to arise in case of fulfillment of certain conditions.

Allah knows the best.