The Communiqué No. 2022/11, published in the Official Gazette dated 14.03.2022, on the introduction of physical assets in gold into the financial system, entered into force.
What is the purpose of the communiqué?
It aims to enable domestic resident real and legal persons to convert their physical gold assets deposited in their gold accounts in banks through authorized jewelers and refineries or directly to bank branches, into Turkish lira deposit and participation accounts, and to regulate the procedures and principles regarding the support to be provided to account holders.
Are there any exceptions? If found, what?
In the communique detailing the acceptance of physical gold, the transformation of gold accounts and the end of maturity transactions, exceptions were also determined.
Accordingly, domestic resident real and legal persons who want to participate in the application within the scope of accepting physical gold will have to have a gold account with banks that have an agreement with the authorized refinery at the time of transaction. Real and legal persons residing in the country will deliver their physical gold to the authorized jeweler or bank in order to determine the amount of gold in grams to be calculated over the milliem value.
The amount of pure gold, which has been agreed with the gold acceptance system, will be transferred to the gold account of the domestic real or legal person in the bank, through the authorized refinery or the bank at the time of the transaction. The gold received physically by the authorized jeweler or the bank will be delivered to the authorized refinery for processing.
Those that are processed and completed below the standard by the authorized refinery will be physically transferred to the relevant bank.
How will the gold accounts be converted?
If the account holder requests, the real gold balance in the account can be converted into Turkish lira at the conversion price, and a Turkish lira deposit or participation account with a maturity of 3, 6 months or 1 year can be opened. The gold converted into Turkish lira deposit or participation accounts will be sold to the Central Bank by the banks at the conversion price.
The interest rate to be applied by the bank to the deposit account cannot be below the one-week repo auction rate determined by the Central Bank. In case the income to be provided to the participation account is lower than the cost incurred in the purchase transactions with the one-week resale promise made by the Central Bank within the scope of open market operations with participation banks, the participation bank will be able to cover the difference within the framework of participation banking principles. No payment will be made by the Central Bank for the unpaid portion.
The Central Bank will be authorized to determine the maximum interest rate to be applied to the bank's deposit account. On the other hand, Turkish lira deposit or participation accounts opened by the Central Bank within the scope of this application will be able to be renewed at the end of maturity. The renewed account will continue to benefit from the support based on the gold amount converted at the first opening and the expiry price. The scope, procedures and principles regarding the renewal of the account will be determined by the Central Bank.
What are the transactions that will take place with the expiry of the term?
Within the scope of the Communiqué, for Turkish lira deposit or participation accounts opened with a maturity of 3, 6 months or 1 year, the bank will pay the principal and interest to the Turkish lira deposit account holder, and the participation account balance at the end of the maturity, to the participation account holder.
If the expiry price is higher than the conversion price and the amount calculated over the price difference is higher than the interest or profit share to be paid by the bank, the amount calculated by deducting interest or profit share from the amount calculated over the price difference will be transferred to the relevant bank by the Central Bank to be paid to the deposit or participation account holder.
What will happen if the withdrawal is made before the expiry date?
If the Turkish lira deposit or participation account is withdrawn before the maturity date, the Central Bank will not pay for the price difference. In accordance with the procedures and principles to be determined by the Central Bank, additional returns can be paid to Turkish lira deposit or participation accounts opened within the scope of this application.
Accounts opened within the scope of the Communiqué on Supporting the Conversion from Gold Accounts to Turkish Lira Deposit and Participation Accounts and opened by converting the scrap gold equivalent into Turkish lira will also be able to benefit from additional income.
What are the other issues mentioned in the Communiqué?
Banks will check that all transactions to be carried out within the scope of the Communiqué are carried out in accordance with national and international standards regarding the prevention of money laundering and financing of terrorism. Commissions and/or expenses can be paid to authorized jewelers, authorized refineries and banks, within the framework of the procedures and principles to be determined by the Central Bank.
On the other hand, the CBRT also changed the Communiqué on Supporting the Conversion from Gold Accounts to Turkish Lira Deposit and Participation Accounts. Accordingly, the gold account of domestic resident real persons on December 28, 2021, and of domestic legal entities on December 31, 2021 can be converted into Turkish lira at the conversion price, if the account holder requests it.
Ünal § Partners Legal Team
Comments