Banks in Turkey

The banking sector forms a great part of the Turkish financial system in its dynamic economy. Most of the transactions and activities of money and capital markets are carried out by banks. Most State banks were established to finance a particular industry such as agriculture for example (Ziraat Bank), but private banks generally have close connections to large industrial groups and holdings.

First banking activities started in early 1800's with the so-called money-changers and the Galata bankers. During this period, all quasi-banking activities were carried out by money-changers, and The Galata bankers consisted mostly of the ethnic-minorities in Istanbul. With the deterioration of the Ottoman Empire's financial situation after the Crimean war, the Empire needed external financial support. It was during this period when representatives of several foreign banks came to Istanbul with the purpose of extending credits to the Empire at high interest rates. The Ottoman Bank (Osmanli Bankasi) was established in 1856 with its head office in London and served as the Central Bank until the 1930's.

The Central Bank, founded in the early 1930's, has the usual central bank responsibilities, such as issuing banknotes, protecting the currency, and regulating the banking system and credit. The Central Bank also finances the government's budget deficits and makes loans to public and private banks. But after 1983 the Central Bank began to reduce lending and stepped up its supervisory functions.

Before 1980 there were only 4 foreign banks in Turkey, but their number grew rapidly during the 1980's as the Turgut Ozal government liberalized conditions and today there are almost 50 of them. During these years a series of reforms were adopted to promote financial market development; interest and foreign exchange rates were liberalized, new entrants to the banking system were permitted and foreign banks were encouraged to operate in Turkey.

All banks in Turkey are subject to the Banks Act and to the provisions of other laws regarding to banks. The new Law brought the Banking Regulation and Supervision Agency (abbreviated BDDK in Turkish) into life to safeguard the rights and benefits of depositors. The Banks Association of Turkey (abbreviated as TBB in Turkish) is the representative body of the banking sector in Turkey established for protecting and promoting the professional interests of its members.

As of end of 2023, there are a total of 54 banks operating with 9,482 branches in Turkey and 75 branches abroad.