The Regulatory Compliance, Legal and Operations Department provides legal consultancy to all KKB units.

Regulatory Compliance and Legal Unit

The Unit aims to ensure compliance of the products and services KKB plans to offer with applicable laws and alignment of existing products and services with the changes to applicable laws. Today, many companies across industries, in particular those in banking and finance, target moving their products and services to the digital environment to boost efficiency and reduce costs with the use of advanced technology. Against this backdrop, the Unit aims to conduct studies for the establishment of the necessary legal infrastructure to assist in implementing these corporate digitalization strategies. The Unit is also in charge of preparing the contracts KKB will execute with members, customers, and suppliers, ensuring coordination between relevant KKB departments and companies providing consultancy services in trademark and patent processes, selecting the law firms to provide legal services, and monitoring their services, following up litigation cases planned to be monitored within KKB, providing legal advice to the units within KKB, and providing support to General Assembly preparations.

Audits Conducted, Sanctions and Penalties Imposed During the Period

As of December 31, 2020, the pending lawsuits filed against the Company with pecuniary compensation claims are as follows:

• The lawsuit filed on November 28, 2013, with a claim of TRY 100,000 for pecuniary and non-pecuniary damages, each of which amount to TRY 50,000 and with a claim to at least 20% of the possible earnings,
• A lawsuit filed on 27.10.2016 against a bank and KKB with a claim of TRY 1,000 for pecuniary damages and TRY 30,000 for non-pecuniary damages.
• The lawsuit filed on July 30, 2018, with a non-pecuniary damage claim amounting to TRY 20,000.
• The lawsuit filed on March 3, 2020, with a claim amounting to TRY 210,
• 4 reinstatement lawsuits.
• 5 severance and/or notice pay lawsuits.

In 2020, a total of TRY 3,500 was imposed on the Company in respect of administrative fines.

The Operations Center responds to the requests of members, customers, and the units within the organization by proxy, both on behalf of KKB and the Risk Center of the Banks Association of Turkey.

Competition Status of the Executives of the Company

The members of the Board of Directors of KKB did not engage in any business or transactions that violate the non-competition agreement, neither for themselves nor on behalf of others.

Dividend Distribution Proposal

During the Board of Directors meeting dated February 24, 2021, and in line with the decision numbered 2021/08, it was unanimously resolved by the participating members to submit for the approval of the General Assembly not to distribute the net income remaining from the Company’s 2020 Gross Profit after setting aside the legal reserves, to the shareholders, and to keep it in the Extraordinary Reserves Account.

Operations Center

The Operations Center ensures the continuity and functioning of business processes at KKB. To this end, it responds to the requests of members, customers, and the units within the organization by proxy, both on behalf of KKB and the Risk Center of the Banks Association of Turkey. The Unit operates with two teams: Authorization Management and Official Correspondence.

The Authorization Management Team’s activities include authorizing internal and external web applications of KKB; defining memberships and subscriptions; meeting customer report requests related to the RC Risk Report, making Findeks operational definitions related to real sector customers, while ensuring that the data types, which are notified to the members daily, are logged in the system.

The Official Correspondence Team’s activities include responding to correspondence from customers as well as official institutions such as the courts, public prosecutor’s office, security directorate, the Ministry of Finance, Capital Markets Board (CMB), Social Security Institution (SSI), and the Revenue Administration within the legally required time frame. The team also ensures that the reports requested by the official institutions are produced accurately and completely and become ready for submission.

The first phase of the project to renew the Document Management System has been initiated in 2020. The Document Management System is used to monitor official authorities’ requests and the forms sent by members in line with circular orders. With the new system, all correspondences with official authorities have been fully integrated with the system, and all manual processes have been abandoned. This, in turn, reduced operational risks and improved efficiency.

In the second phase of the project, all data in the old system will be transferred to the new system. Preparations for this phase have already started and it is planned to be implemented in the first quarter of 2021.