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Ethical Principles of Banking
Ethical Principles of Banking
Ethical Principles of Banking
Ethical Principles of Banking

In the decision numbered 693 made by the Administrative Board of Albaraka Türk, the following “Banking Ethical Principles” adopted by Turkey Participation Banks Association were decided to be followed in the activities of Albaraka Türk.

Ethical Principles of Banking
Ethical Principles of Banking
Ethical Principles of Banking
Ethical Principles of Banking

I. Introduction

Ethics is a collection of criteria searching for the values, norms and rules that form the essentials of the individual and social relations established by people from the moral aspects of right/wrong or good/bad. While the professional ethics regulates the relations of the individuals that form a professional group among themselves and between them and the society, the organizational ethics defines the inner-organizational culture in the solution of problems originating from the inside and outside of the organization by means of introducing certain rules.

As the Banks have been effecting the function of investment and the function of saving by means of playing a cohesive intermediary role between the parties in society that are supplying or demanding funds and simultaneously have been aiming to operate with respect to principles of profitability and productivity, this stipulates the obligation that the banks must operate in accordance with Ethical Principles in the professional and organizational fields.

Taking into consideration the expansion in the Banking system, the improvement of the quality of banking services, the optimal use of resources, the prevention of the unfair competition between themselves, Banks must regulate their relations among themselves as well as their conducts with other institutions and customers and shareholders and employees in concordance with the Ethical Principles.

II. General Provisions

Objectives and Scope
Article 1 – The essential objective of the ‘Ethical Principles For Banks’, which shall be prevalent in all kinds of businesses transactions not only between banks (themselves) but also between banks and their customers, share-holders, employees and other institutions, is to ensure the continuation of the current respect towards banking profession in the society, the development and sustainability of the very feeling of prestige which is known as Professional Dignity, as well as the protection of stability and trust in the banking sector.

Legal Basis
Article 2 – These Ethical Principles have been prepared based upon the provisions of sub-article 2 of Article 75, paragraphs (c) and (e) of Article 80 and sub-article 3 of Article 81 of the Banking Law no. 5411.

General Principles
Article 3 – In consideration of the protection of the rights and benefits of depositors, the attainment of confidence and stability in financial markets as well as the requirements for economic development, Banks must operate in conformity with the general principles mentioned here below so that the systems of deposits and credits will function effectively, such transactions and applications which are likely to cause grave losses in the economy could be prevented, social benefits could be heeded, and the environment could be protected:

a) Honesty
Banks adhere to the Principle of Honesty in their relations with their customers, employees, shareholders, group firms and other banks, institutions and establishments in the fulfillment of their activities.

b) Impartiality
Taking into consideration the principle of "the essence of success is to respect human beings", banks do not discriminate between their employees or their customers and banks abstain from prejudiced behaviors.

When offering services to their clients, banks do not discriminate with respect to nationality, religion, financial or social statutes, or genders, etc.

c) Trustworthiness
In all their services and transactions, banks give customers clear, comprehensible and accurate information within mutual trust; banks offer timely and perfect services to customers.

d) Transparency
Banks inform their customers about the rights and liabilities as well as the benefits and risks in the products and services offered to them in an explicit, comprehensible and clear manner.

e) Observing Social Benefits and Environment Friendliness
Aside from profitability in their operations, banks pay attention to supporting social and cultural events in light of the principles of observing social benefits and respecting environmental issues.

f) Struggle Against Laundry of Assets Originating From Crime
Within the frame of the international norms and the provisions of international regulations, banks pay attention to cooperation not only between themselves, but also between the other institutions and agencies as well as authorized bodies related to the issue in adopting as the essential principle of struggle against laundry of assets Originating from criminal acts, corruption and similar offences. Banks take measures in this respect within their structure and organize training programs for their employees.

g) Insiders’ Trading
Banks take all kinds of measures to prevent the use of the data and information acquired from insiders.

III. Banks’ Relations with Public Institutions and Establishments

Relations with Public Institutions and Establishments
Article 4 – In their relations with public institutions and agencies, banks act in accordance with the principles of honesty, accountability and transparency. Furthermore, they pay attention to submitting information, documents and records demanded for supervision and auditing as per the regulations in an accurate, perfect and timely manner.

IV. Interbank Relations

Data Exchange
Article 5 – Banks exchange data with each other on any issue in an accurate and systematic manner as far as it is allowed by the regulations.

Article 6 – Banks abstain from all applications that might cause unfair competition in personnel employment.

In spite of the freedom for contracting and mobility of staff members as per the Labor Law and provisions of the related regulations, banks pay attention to employing their own staff in such manner that it does not to harm or hinder the services of other banks.

They act objectively and fairly in responding the demands of other banks for requesting information about their former employees.


Ethical Principles of Banking

Article 7 – Banks regard competition as a contest, in conformity with regulations, which ensures freedom of economical decisions in all banks of the banking industry. Accordingly, apart from their own benefits in their acts and deeds, banks carry out their business in the free market economy: Banks refrain from acts and deeds that are likely to bring about unfair competition in context of the following principles:

a) Generally speaking, the trust felt towards the banking sector should be permanent,

b) Efforts should be exerted for the development of the sector,

c) Common (mutual) benefits should be observed. This principle is not only valid for banks as legal entities but also for acts and deeds of their staff members

Announcement and Advertisements
Article 8 –In their announcements and advertisements about marketing and public relations of their financial standings, banking products and services, Banks act honestly and realistically in conformity with legal regulations, moral values wherein they abstain from all kinds of acts that could harm the prestige of Banking profession.

Banks do not use any statements or phrases in their announcements or advertisements that may injure or discredit other banks or the products and services offered by them.

V. Banks’ Relations with Their Customers


Acknowledgement of Customers
Article 9 – As regards to all kinds of products and services they offer to their customers, banks issue data in an accurate, perfect and timely manner in conformity with the limits stated in related regulations on any subject in any stage of service relations.

Secrets of Customers
Article 10 – Excluding those persons and offices that are legally and explicitly authorized to demand information and documents from banks, Banks must keep secrets of their clients and meticulously file all kinds of information and documents pertaining to their customers.

Quality of Service
Article 11 – Banks regard the service quality as a pre-requisite for meeting customer needs and expectations by means of the quality in their services to be offered. In this regards, banks pay attention to the proper use of technological infrastructure and best qualified human resource, the two fundamental elements of this concept, in the permanent development of service quality.

Banks offer services to their customers all in the same quality, at the same level. Nevertheless, that the target market is determined and that the organizational structure and the scope of products differ according to the target mass or that the customers in different risk groups are approached in different manners may not be interpreted that discrimination is done among customers or customers are being categorized.

Complaints of Customers
Article 12 – Banks establish systems through which all questions of their customers arising from the services provided, shall be responded. Banks convey the information on this service to their customers.

Banks investigate the causes for the customer complaints and take necessary measures to prevent their repeating. Banks provide information to their employees about what are the wrong deeds and acts that cause complaints and how to avoid their repetition.

Article 13 – Banks agree that the Security concept covers not only the measures for protection of the servicing circles (offices) in banking sector against all kinds of negative factors, but also for prevention of all kinds of violations that might cause losses technically in the services offered to customers.

Banks take all technical and legal measures to ensure security of operations in all kinds of servicing circles by virtue of the developing services and changing service channels parallel to the technological progress and electronic banking. On the other hand, they inform their customers of those measures they have taken and further measures to be taken by customers.

VI. Banks’ Relations With Their Employees


Banks’ Relations With Their Employees
Article 14 – Banks pay attention to ensuring their staff cadre which must be composed of employees who are furnished with the necessary knowledge, experience and sense of responsibilities that are required for their offices. Banks may not recruit any employee who does not bear the legal conditions mentioned in the related laws and regulations, particularly in the Banking Law no. 5411.

Recruitment and Career Enhancement
Article 15 – Banks pay attention to offering equal opportunities to their employees not only in recruitment but also in career development without any discrimination among the members of the staff.

Based on the principle that the human resources are to be directed in the best manner, Banks offer facilities like training & education, courses & seminars, etc so that their employees can build up the level of contemporary professional banking. In the career promotions of the employees.

Banks take into consideration, not only the knowledge, ability and individual success, but also loyalty to the Ethical Principles For Banking and the wisdom in their practical implementation.

Representation Principles and Working Environment
Article 16 – Banks prepare internal regulations stipulating that their employees should be clean and neat in their working circles in harmony with the prestige of the banking profession as well as the awareness on that they are representing their bank.

Banks take measures to increase the motivation of the employees in all service-divisions and to offer service under better conditions; also, Banks ensure formation of hygienic and secure working environment.

Working Hours
Article 17 – Banks heed the employment of a sufficient number of personnel pro-rata to the volume of work required. They organize the employees to work in such a way that maximum yield shall be derived from the work within the office hours. Banks exert utmost effort employees do not work extra hours and take their annual leaves regularly.

Ethical Principles of Banking

Employee Relations with Customers
Article 18 – Banks prepare in-house charters in order to prevent their employees from:

- Getting involved in such relations with customers in the manner violating the ethical principles like personal debt/credit deals, bails or opening joint-accounts with customers,

- Accepting gifts from current or potential customers of the bank,

- Obtaining personal advantage (bearing self-interest) either from their business environment or the business opportunities of customers of their banks by abusing their positions and titles in the bank.

Employee Rights
Article 19 – Banks pay attention to granting all rights of their employees accurately, arising from the clauses of regulations to which they are subject to.

VII- Professional Rules and Ethical Principles for Bank Employees to Abide by

Professional Rules and Ethical Principles That Employees Must Abide By
Article 20 – Bank employees are responsible for adhering to following professional and ethical codes;

a) To abide by the prevailing regulations when fulfilling their tasks,

b) To inform their customers about the benefits to be provided them by means of the products and services offered as well as the risks to be incurred ,

c) To offer impartial and equitable service to customers receiving the same service from the bank,

d) Not to reveal those secrets they have been acquainted with, concerning banks or their customers by virtue of their titles and positions, to anybody else other than the authorities that are legally authorized in an explicit manner in this regard,

e) Not to cause any loss of prestige for the bank in their acts and deeds,

f) Not to deal with such activities that may cause to be regarded as a ‘Business Corporation’ or a ‘Craftsman Firm’,

g) Not to act contrary to the principles of justice, honesty, rectitude, trustworthiness, social liability,

h) To cooperate in joint objectives by forming respectful and meticulous relationships with other staff members of the bank when fulfilling their tasks,

ı) Not to use bank’s assets and resources non-productively or against their scope,

j) Not to generate or acquire personal advantage (self-interest) from their business environment or from the business opportunities of customers of the bank by abusing their titles and official facilities,

k) To reject on the spot any offer made them about personal advantage (self-interest), and to inform such a proposal to their superiors and authorized offices,

l) Not to get involved in those relationships with their customers which are inconsistent with ethical and professional codes like giving or receiving individual loans, guarantees or opening joint accounts,

m) Not to receive gifts, other than the traditional ones, from the current or potential customers,

n) To be aware of the responsibility on the tasks they have undertaken when fulfilling their duties,

o) Not to take office in any private or public institution –other than guilds, foundations, cooperatives and the like– without the consent of their bank.

The Development of the Ethical Principles For Banks

Article 21 – With a view to ensuring development and, if so necessary, amendments in the Ethical Principles, banks may submit proposals to the Board of Directors of their vocational Associations.

VIII. Other Provisions

Determination of Disputes and Sanctions
Article 22 – The Board of Directors of the Association decides whether or not there are transactions or deeds of the banks or their employees against these Ethical Principles. Those banks and/or the banks’ employees that have trespassed these ethical rules are announced on the Website of the Association, and also reported to the Banking Regulation and Supervision Agency.