PASHA BANK ENG 20

was put in effect as of 1 May 2020 by the Board Decision and as a result of the normalization experienced, was decided to be revoked effective from 31 December 2020. In addition to the above mentioned regulations, the following amendments were put into practice: 1. Amendments of the Banking Law The Law Amending the Banking Law and the Other Laws concerning banking was published in the Official Gazette No.31050, dated 25 February 2020, putting important amendments into action. With the amendment made in the 49th article of the Banking Law, titled Risk Group, deputy CEOs and persons with similar titles and the partners and children of the persons within the risk group are also included in the risk group. As a consequence of the amendment in the 60th article of the same law, titled Decrees for Collecting Deposit and Participation Funds, Acceptance of Deposit and Participation Funds, the definition of “Borrower” was removed from the law, replaced by “funds obtained from loan customers”. Through new law legislation, all the funds obtained from loan customers whether be cash or non-cash loan, will not be considered as deposit. Still under the same article and within the framework of procedures and principles determined by the Board, it was stipulated that development and investment banks will not consider the funds obtained from loan customers, partnerships, funds from their partners and the funds drawn from banks, monetary markets, capital markets and organized markets as deposit. Another amendment to the Banking Law is that a sub article titled Keeping Secrets is annexed to Article No.73, thus filling the gap in the reference to the special decree under the Personal Data Protection Law No.6698. It is stipulated that in the event there exists the necessity of disclosing customer information to third parties by the banks; the mentioned personal data can be conveyed and communicated to third parties in our out of Turkey with the bank obtaining explicit consent forms and testimonies from the customer at the time of transaction alongside a transaction based consent prepared by the customer in person. On the other hand, the Banking Regulation and Supervision Agency has been given the authority to decide that the banks should base their information systems specific to banking activities and their backups within the country and It is stipulated that information in the nature of customer secrets or bank secrets can be disclosed exclusively for the specified purposes and only to the extent required by these purposes in line with the principle of proportionality, including the disclosures to be made in exemptions from the confidentiality obligation, 2. Amendments in the Capital Markets Law The law amending the Banking Law has also amended the Capital Markets Law. The article of Debt Instrument Owners ‘Board 31/A has been annexed and the definition and operation of the institution named Debt Instruments Owners’ Board has been introduced. The mentioned board consists of holders of financing bonds and bills in circulation and our Bank as the issuer and through this amendment, it is stipulated that on the export document prepared, the principles/conditions for convening the board to meeting and taking decisions will be required. In addition, clause b) has been annexed to Article 38 of the Capital Markets Law “Collateral Services”, under which it was clarified that the aim is for small investors to be included in big government projects with project financing. Considering this amendment, it has to be noted that there exists various restrictions and special conditions under the Capital Movements Circular for usage of project finance credits as FX. This amendment can be interpreted as creating new areas of activity for our Bank in the long term, as well as having the opinion that amendments under the other regulation should be planned from now on since the Capital Movements Circular covers only the energy projects among project types. 3. Amendments Regarding the Regulation on Bank’s Information Systems and Electronic Banking Services The Communiqué on the Principles to be Considered in Bank Information Systems Management will be revoked with the Regulation on Bank’s Information Systems and Electronic Banking Services being put into effect and under the Article 29 of the new regulation, the management of the process for outsourced services of the banks and the other electronic banking channels were re-amended. Information on Significant Developments Related with the Bank’s Operations and Legal Disclosures 64 Annual Report 2020 PASHA Bank Information on Management and Corporate Governance Practices