PASHA_BANK_ANNUAL REPORT 2022

70 PASHA Bank 2022 Annual Report Information on Significant Developments Related with the Bank’s Operations and Legal Disclosures Disclosures Concerning Administrative or Judicial Sanctions Imposed on the Bank and its Management due to Practices in Violation of Regulations There were no administrative or judicial sanctions imposed on the members of the Board of Directors due to regulatory violations in accordance with Banking Law and related legislation. In 2022, the obligations regarding the administrative and irregularity fines practiced by the regulatory and supervisory authorities for the legislative discords were met by means of benefiting from the discount permitted by the legislation and a total amount of TL 1,086,676,50 was paid. Lawsuits Against the Bank and any Probable Outcomes That Could Impact the Bank’s Financial Situation and Operations There are no lawsuits filed against the Bank in 2022 significant enough to have a material impact on its financial situation or operations. Information on Regulatory Changes that May Significantly Impact the Operations of the Bank 1- Changes on Communique on Required Reserves Central Bank of Republic of Türkiye (CBRT) issued a press release on 23 April 2022 which requires reserves that are being recorded on the liability side of the balance sheets to be also recorded on the asset side to make mandatory policy set stronger. In this context, commercial cash credits in Turkish Lira of banks and financial institutions are subject to mandatory reserves, except for the credit types listed below: • Credits extended to companies defined as SMEs • Credits extended to craftsmen • Export and investment credits • Agricultural credits • Credits extended to institutions and organizations listed within the scope of schedules (I), (II), (III) and (IV) of Law on Public Financial Management and Control numbered 5018, their economic entities and related subsidiaries and investments. • Business credit cards • Credits extended to financial institutions 2- Changes in Communique on Securities Establishment Within the scope of communique 2022/23 issued on the Official Gazette dated 20 August 2022, numbered 31929, which make changes in CBRT’s Communique on Securities Establishment numbered 2022/20, Turkish Lira cash credits with procedures and principles defined by the CBRT are considered as assets subject to security establishment. After this definition, Application Instructions on Securities Establishment was issued. In accordance with these instructions, the banks are instructed to extend commercial TL credits against spending to monitor these credits’ use in line with their purposes based on their types as SME, export and investment credits. If credits are used against those instructions, it is required by CBRT that security establishment will be applied with rates stated at those instructions. 3- Changes in Banks’ Net Foreign Currency Position Based on the changes made with the regulation issued at the Official Gazette dated 10 December 2022, numbered 32039, related with BRSA’s Foreign Currency Net General Position/ Equity Standard Rate to be calculated based on both consolidated and non- consolidated figures by the banks, foreign currency net general position is reduced to 5% effective 9 January 2023. 4- Limitations on Turkish Lira (TL) Credit Extensio n In accordance with BRSA’s resolution on 24 June 2022, numbered 10250, a limitation is applied for TL credits used by companies subject to independent audit, if TL equivalent of foreign currency cash assets exceeds TL 15 million and if this amount exceeds 10 % of total assets or net sales for the year, whichever is higher. With the resolution number 10389 dated 21 October 2022, numerical limitations were revised as TL 10 million and 5%. 5- Circular on Confidentiality With changes made on Article 73 of the Banking Law on Confidentiality on 2 February 2022, scope was widened and some exceptions were provided. After these changes, Regulation on Information on Significant Developments Related with the Bank’s Operations and Legal Disclosures