NEW TURKISH LIRA
Compliance Activities
in
Banking Sector
Leman Türkoğlu
The Banks Association of Turkey
TRY(YTL) Workgroup Leader
TRY Workgroup
1
Agenda

Overview of Regulations effecting the Banks

Effects on Products / Services

Project Approach

Activities performed by TRY Workgroup

Critical Success Factors
TRY Workgroup
2
Overview of Regulations effecting the Banks
New monetary unit TRY
• 1.000.000 TL = 1 TRY
• 2 digits after the comma will be New Kuruş
• 10.000 TL = 1 New Kuruş
Current banknotes and coins will be in circulation till 2006
Accounting
• Records for 2004 and before will be kept as they are since they
provide a basis for balance sheet and financial information
• Starting from 2005, all transactions requiring accounting will
be kept in TRY
Labeling, Rates and Price Lists
• Without effecting the rates, prices and commissions will be
published in both units (TRL and TRY)
TRY Workgroup
3
Overview of Regulations effecting the Banks
Legal Aspects
Documents dated before 1.1.2005 will not be required to be renewed
Credit Agreements
Payment Plans
Security Letters/Collaterals
Insurance Policies
Units requiring sensitivity will operate in line with regulations set by
authorities
Foreign Exchange
Investment Funds
Stocks
Treasury Bonds
Government Bonds
Rounding Rule : 5.000 TL and over will be accepted as 1 New
Kuruş, amounts below 5.000 TL will be accepted as “zero”
123.625.000 TL = 123,63 TRY 123.625.128 TL = 123,63 TRY
123.624.998 TL = 123,62 TRY
TRY Workgroup
4
Agenda

Overview of Regulations effecting the Banks

Effects on Products / Services

Project Approach

Activities performed by TRY Workgroup

Critical Success Factors
TRY Workgroup
5
Effects on Products / Services
Accounts
•
Balances of all TL accounts and their limits, if any, will be
converted to TRY based on the conversion rate in the law.
•
Account No.s and account books can be changed or kept
same depending on bank’s system
•
Interest accruals as of the end of 2004 will be realized as TL
•
Following January 1st, 2005, amounts visible on all slips will
be TRY, no further change is expected for the amount.
TRY Workgroup
6
Effects on Products / Services
Deposits / Withdrawals
•
TL and YTL will be deposited to and withdrawn from ATMs during year
2005 and transactions will be recorded as YTL.
Collection / payment instructions performed via banks
•
Instructions pertaining to year 2005 given prior to 1.1.2005
(water, electricity, natural gas, telephone etc. invoice collections,
automatic payment / collection products, tax / SSK insurance
payments etc.) will be processed in TRY at their maturity date
•
All invoices to be sent to banks from relevant institutions until
January 1st, 2005, will be in TL
•
Invoices following January 1st, 2005, will be submitted as TRY
TRY Workgroup
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Effects on Products / Services
Checks / Promissory Notes
• Checks and Promissory Notes, which are due in 2005, are
not required to be in TRY. Those issued in TL will be
automatically converted by banks
• TRY cheque books will be issued to bank customers
following January 1st, 2005.
• TL cheque books can be used in 2005 by correcting the
monetary unit
• TL Checks presented in 2005 will be converted and
processed in TRY.
• Promissory Notes issued in 2004 and due in 2005 will be
transacted in TRY after 1.1.2005
TRY Workgroup
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Effects on Products / Services
Credit Cards
•
Current limits will be converted to TRY based on the
conversion rate at 31 December 2004
•
Whilst statements for December will vary according to the
bank;
• Transaction details will appear in TL
• Minimum payment and total due payment will appear
in TL and TRY
•
Statements for year 2005 will be printed in TRY
•
Payments may be done in TL or TRY banknotes during 2005
•
Current automatic payment instructions will be converted to
TRY at the night of 31 December 2004, payment instructions
in year 2005 will be in TRY
TRY Workgroup
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Effects on Products / Services
POS devices
•
Depending on the decision of banks;
• Original amounts in POS slips and ATM receipts for the period
01.10.2004 - 31.12.2004 will be in TL, alternative amounts will be
usable in TRY
• Original amounts for the period 01.01.2005 - 31.12.2005 will be
in TRY, and, depending on bank’s discretion, TL will be usable in
alternative amount presentations.
• Following 01.01.2006, all POS and ATM receipts will be issued in
only TRY
•
Standard for entering Kuruş digits in POS devices has been
decided
•
(000) button on POS device will be deactivated on 01.01.2005
TRY Workgroup
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Effects on Products / Services
Merchant Applications
• File and data transfers will be in TRY,
• Merchant reporting will in TRY
• Merchant blockages due for 2005 will be converted to TRY
Internet Banking
• Year 2004 will be viewed in TL, and year 2005 will be viewed
in TRY
• All functions will be TRY compatible
• Future dated transactions assigned to be processed in 2005
will be converted in TRY based on the conversion rate valid in
the law at the night of 31 December2004
Other Advantages
• Point calculations provided in various products and
calculations for consequent advantages will be in TRY
TRY Workgroup
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Effects on Products / Services
EFT/EMKT Systems
•
Development activities for Electronic Funds
Transfer/Electronic Securities Transfer systems are
completed. Testing activities will be launched in October
Foreign Exchange Buying / Selling Transactions
•
Foreign exchange sensitivity will be expressed in 5 digits
Those having value over 1 TRY will be expressed in 4 digits,
Those having value below 1 TRY will be expressed in 5 digits
For example;
Foreign Exchange Currency
Buying
Selling
1 US Dollars
1,4880
1,4950 TRY
1 Denmark Crone
0,24352
0,24432 TRY
TRY Workgroup
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Effects on Products / Services
Stocks
•
Regulation currently applied as per 1.000.000 TL nominal = 1.000 units =1
lot is changed to 1,00 TRY nominal = 1 unit =1 lot in the new system
•
In İMKB Stock Market , transactions will be executed over 1 unit / nominal
TRY and its multiples, stock prices will be announced for the stock with 1
TRY nominal value and 2 digits will be used after the point.
•
Remainder transactions will be abolished within the Stock Exchange
following 01.01.2005
•
Due to TRY conversion activities , no transaction will be executed in Stock
Market between 30-31 December 2004
•
Stocks entrusted to the customer will be converted to TRY by dividing each
unit to 1.000
For example;
Amount of stocks entrusted a customer, who owns 15.626 units of X stocks which has
a market value of 8.950 TL, following 01.01.2005 will be 15,626 units, and in line
with this, the price of this stock in the Stock Market will be announced as 8,95 TRY.
Following TRY conversion, 15 units will be sellable in the Stock Exchange and 0,626
will not be transacted in the Stock Exchange since it the remained.
TRY Workgroup
13
Effects on Products / Services
Investment Funds
•
Prices will be announced in TRY with 6 digits
Current price of the Investment Fund
: 6.365.697 TL
Price to be shown after 01.01.05
: 6,365697 TRY
Treasury / Government Bonds
•
Prices currently announced over 100.000 TL nominal will be announced
over 100 TRY nominal starting from 1 January 2005
•
Nominal values of treasury bonds and government bonds will be converted by
dividing to 1.000.000 TL
For example;
The account of an investor who holds a 10.000.000.000 TL nominal
discount bond due on 26 January 2005 will be 10.000 TRY nominal after
conversion and the investor will get 10.000 TRY after the maturity ( on
26.01.2005)
TRY Workgroup
14
Effects on Products / Services
Repo
•
Will be divided by 1.000.000 and entered into accounts after
roundation
For example;
• A repo transaction which has a net return amount of
1.250.356.500 TL on 05 January, will be reflected to the
account of relevant customer as 1.250,36 TRY
TRY Workgroup
15
Agenda

Overview of Regulations effecting the Banks

Effects on Products / Services

Project Approach

Activities performed by TRY Workgroup

Critical Success Factors
TRY Workgroup
16
Project Approach
•
Participation of all critical Business and Administrative
Units is essential. Following BUs are leading ;
• Banking Operations
• Accounting and Finance
• Treasury – Funds Management
• Technology
• Auditing
•
Project Management disciplines ;
• Programme/Project Planning, Monitoring, and
Reporting
• Risk Management
• Communication Management
• Test Management
• Change Management /Configuration Management
• Quality Management
TRY Workgroup
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Project Approach
Milestones ;
•
Planning and Budget Approval
• Inventory gathering and Impact Analysis
• Establishment of Test Methods and Test Environments
• Plan and Budget approval
•
Application Development/Testing
• Detailed Analysis, Coding, Unit Testing, Integration
Testing, User Acceptance Testing
•
Conversion
• Modifications in data structure/tables
• Conversion programs and tests
•
Production Roll-out (Phased/D-Day implementation)
•
Training
•
D-day (31.Dec.2004) Activities
TRY Workgroup
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Project Approach
Budget Requirements
Human Resources
• Technology (internal and external source utilization)
• Participation of business units in User Acceptance Tests
Hardware and Tools
• Technology (Mainframe, Distributed Systems, Test
Branches, code remediation tools)
• Physical Money
• Adaptation of banknote counting machines
• Coin counting and packaging machines
Training / Stationary /Preprinted Material & Brochures
Staff
Customers
Correspondent Banks
Investors
Affiliates/Subsidiaries
TRY Workgroup
19
Agenda

Overview of Regulations effecting the Banks

Effects on Products / Services

Project Approach

Activities performed by TRY Workgroup

Critical Success Factors
TRY Workgroup
20
Activities performed by TRY Workgroup
Objective
•
•
Information sharing on common problems and issues
among banks , related corporates and authorities
Preparing banks as well as their employees and customers
for a successful migration to TRY
TRY Workgroups /Subgroups
• Project Monitoring and Communication
• Securities
• Relationship management with Corporations
• Legal
• Accounting
Total of 50 people have participated in the activities
TRY Workgroup
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Activities performed by TRY Workgroup
• 150 questions and recommendations which are compiled from all banks are
classified and evaluated in relevant Workgroups
• Correspondence and meetings with critical entities are held (Utility Companies,
Authorities, SSK, Ziraat Bank, BKM.VISA , Mastercard etc.)
• Since 19 December 2003 following meetings are held :
4 TRY Supreme Workgroup
9 Project Monitoring and Communication Sub-Workgroup
9 Securities Sub-Workgroup
11 Corporations Sub-Workgroup
4 Legal Sub-Workgroup
3 general (with the participation of all banks, private finance
institutions and authorized superior bodies )
• Turkish Banking Association Board of Directors closely monitors the activities
• www.YTL.gen.tr site offers a discussion platform for members
• Information to Press & Media is supplied when requested
TRY Workgroup
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Activities performed by TRY Workgroup
• Meetings with Public Relations Outsource Company of Central Bank are held
• Standard letter text providing information to customers of banks is prepared
• Deadline for the completion of tests between utility companies and banks is
agreed to be end of October 2004
• A standard is established for files mutually exchanged between banks and
their corporate customers (Example:999999999999.99)
• Applications are submitted to legal authorities and institutions for
issues on which resolution is expected.
• Cash register / POS integration, completion of preparations by
cash register firms by 31.12.2004
• Postponing new nation-wide projects
• Plans for TRY transition in Cyprus
• Enforcing TRL and TRY codes in SWIFT after January 1st
• Certification tests and self-test facilities with BKM, VISA and Mastercard
TRY Workgroup
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Activities performed by TRY Workgroup
•
Information aimed to monitor project progress in banks is
consolidated by TBB and shared with Central Bank and Banking
Regulation and Supervision Agency (BDDK) at the end of each
month starting from March 2004
General Questions :
1. Is there a TRY Project Coordinator in your bank ?
2. Is there a TRY Steering Committee ?
3. Is there a General Work Plan for TRY Project ?
4. Are contracts in regards to TRY migration finalized with
software vendors ?
Milestones :
• Date of Analysis / Development Completion
• Realization Percentage (%)
• Test Completion Date
TRY Workgroup
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Activities performed by TRY Workgroup
Applications with Interfaces to other Banks/Data Processing Centers
• EFT/EMKT
• POS Applications
• Check / Bond Applications
• SWIFT
• Credit Cards
Bank Specific Applications
• Deposits
• Credits
• Foreign Operations
• Accounting and Financial Control
• Treasury and Securities
• Other Institution Payments/collections
• Alternative Distribution Channels (Non-Branch Banking )
• Payment /Collection Systems
TRY Workgroup
25
Agenda

Overview of Regulations effecting the Banks

Effects on Products / Services

Project Approach

Activities performed by TRY Workgroup

Critical Success Factors
TRY Workgroup
26
Critical Success Factors
•
Timely receipt of official notifications and communiqués
from Authorities (eg : the Ministry of Finance, SPK, IMKB,
TCMB )
•
Readiness of Bank customers and other institutions and
performance of mutual tests
•
Obtaining support which is ought to be provided by software
and data provider firms with no delay
•
Amount fields in spreadsheets (i.e. excel files )
•
Teamwork and inter-institutional coordination
TRY Workgroup
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Thank you..
TRY Workgroup
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