National and Global Islamic Financial Architecture:
Prolems and Possible Solutions for the OIC Member Countries
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provided the necessary foundation for a robust arbitration system for international disputes in
the country. This has been strengthened by the ratification of a number of international
conventions and treaties in the field, which includes: the New York Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, the European Convention on
International Commercial Arbitration, and the Convention on Settlement of Investment
Disputes between States and Nationals of Other States (Levush, 2014).
For domestic disputes, The Code on Civil Procedure (CCP), No. 6100, issued in the Official
Gazette on 04/02/2011 makes provisions for the arbitration of disputes involving no foreign
element and originating within the country (Demirci, 2015).
The main arbitration organisations in Turkey are Istanbul Chamber of Commerce (ICC), Union
of Chambers and Commodity Exchanges of Turkey (UCCET), International Chamber of
Commerce Turkish National Committee (ICCTNC), and the recently established Istanbul
Arbitration Centre (IAC). As identified in the relevant law, IAC’s remit includes setting the rules
for arbitration and alternative dispute resolution methods and carrying out related services
and co-operating with foreign and local persons and entities related to arbitration and
alternative dispute resolution methods. It should be noted that these organisations have their
own rules for arbitration at both domestic and international level.
Islamic finance related disputes and arbitrations in Turkey, as part of commercial and business
activity, are subject to the same regulation, law and procedures as conventional finance.
Bankruptcy and Resolution of Banks
The Financial Safety Net brings together the main financial entities in Turkey: BRSA, CBRT
(Central Bank of Republic of Turkey), Undersecretariat of Treasury, CMB (Capital Markets
Board) and SDIF (Savings Deposit Insurance Fund), which is also charged with handling
resolution matters (Kucukoglu Keles, 2013). Although protection of savings deposit in Turkey
can be traced back to a particular law originating in 1933, “Banks Liquidation Fund” was
founded in 1960 and the SDIF was established in 1983 within the body of Central Bank of the
Republic of Turkey. The SDIF has achieved an autonomous status by the Law No: 5020 in 2003,
while BRSA was established in 31/08/2000 as the sole regulative authority of the banking and
financial institutions.
As regards to the legal framework for Financial Safety Net, three entities are mentioned
(Kucukoglu Keles, 2013): the Coordination Committee working according to Banking Law No
5411 (Article 100), the Financial Sector Committee operating according to Banking Law No
5411 (Article 99) and the Financial Stability Committee operating according to the Law on the
Structures and Duties of the Undersecretariat of Treasury (No. 4059, Additional Clause 4). The
objective of these entities is to promote information sharing, cooperation and coordination
among institutions towards ensuring confidence, stability and development of the financial
markets.
BRSA Supervision can determine if there is a need to intervene. This intervention is possible
according to Banking Law No. 5411 (Article 67) in relation to the following (Kucukoglu Keles,
2013): Maturity Gap between assets and liabilities; incompliance with the provisions
pertaining to liquidity; insufficient profitability to reliably perform its activities; insufficient
capital adequacy; deterioration in the quality of the assets that will weaken the financial