Financial crises that took place on a global scale of which the effects are endured to this day still prove the importance of financial stability for countries. In accordance, Savings Deposit Insurance Fund (SDIF), an important component of the financial safety net of Turkey, was established in 1983 to insure the deposits and the participation funds in banks, resolution of them and to recover the losses to the public. SDIF operates as a significant member of the financial safety net in cooperation with other governmental bodies.
As part of the State of Emergency and the legal arrangements following the treacherous coup attempt on 15 July, 2016, SDIF was appointed as trusteeship to a number of companies which were owned, associated with or in connection with the Fethullahist Terrorist Organization/ Parallel State Structure (FETÖ/PDY) which was detected as a threat to national security. SDIF was also assigned the task to resolve media and press institutions whose assets were transferred to it for sale. SDIF was given above mentioned tasks by virtue of its qualified and skilled staff, as well as its institutional expertise.
Primary task and objective of the SDIF while performing its trusteeship duty is to conduct operations of these companies in accordance with business practices acting as a prudent businessman and to maintain contribution of these companies to the national economy. The companies which are assessed to be “unviable” due to their financial or partnership structures, market conditions or other issues will be sold to a third party or liquidated to weather their negative effects to the economy. One other major concern for the SDIF is to avoid unjust treatment of the employees of these companies, and to prevent unemployment. Additionally, transparency and accountability when performing its trusteeship duty is of utmost importance, as with all operations of the SDIF.
As of March 2018, 985 companies and businesses from 44 cities of Turkey are under the trusteeship of the SDIF. Additionally, the SDIF has been assigned as trustee to shares below 50% of 142 companies and assets of 125 natural persons. These companies have a total asset size of approximately 49.4 billion TL, with 24.6 billion TL in total revenues and 19.7 billion TL in total equity. 50,192 persons are employed in these companies.
Besides its trusteeship duty, SDIF meticulously carries out the task of determining, evaluating and sale of the assets of 149 media and press institutions that were closed down during the State of Emergency and were transferred to it by the Ministry of Finance for said purposes.
Within the scope of deposit insurance activities to protect rights and interest of the depositors, deposit insurance reserve of the SDIF reached 7.498 million USD as of the end of 2017. This amount equals 7.6% of the total insured deposits and participation funds which is well above the International standards. On the other hand, taking into account that we in an era where global crises and the geopolitical risks ever so often threaten us, we feel that the deposit insurance reserve, which is of significant importance with regard to minimizing losses to the public and reflecting the financial strength of the deposit insurance system, should be raised even to a higher level.
Up to the present, 26 banks, 25 of which before 2004, have been transferred to the SDIF. The SDIF, by way of carrying out operations to provide that these banks were resolved efficiently, swiftly and by minimizing the cost to the public, ensured removal of failed banks from the system without damaging confidence and reintroducing the banks that are viable to the system.
Within the context of efforts to recover the burden which the banks transferred to the SDIF imposed to the public, the amount of collections reached a total of 22,971 million USD as of the end of 2017. Of this amount, 12,353 million USD of debt was repaid to the Undersecretariat of Treasury, while 1,418 million USD of advances was repaid to the Central Bank of Turkey. In addition, approximately 5,577 million USD of funds were transferred to other public organizations and institutions, particularly the Ministry of Finance, and 1,895 million USD of funds were transferred to other agencies and institutions.
The SDIF also puts significant emphasis on international cooperation and to comply with international principles and standards within the scope of its field. In this context, in addition to strengthening cooperation with the International Association of Deposit Insurers (IADI) and the European Forum of Deposit Insurers (EFDI) as an active member, the SDIF intensively carries out its work towards compliance with the European Union (EU) standards and fundamental principles established by the Financial Stability Board (FSB), as well as enhancing communication, information and expertise sharing with other equivalent institutions.
The SDIF makes, and will continue to make great effort to perform the tasks it undertakes in the best way possible and will carry on its operations with the awareness that it fulfills an important duty with Trusteeship activities, along with significant contributions to financial stability.