Newsletter-21

254 NEWSLETTER 2016 is roots in Art. 2 of the Turkish Civil Code numbered 4721, and is also known as the principle of good faith. Accordingly, the principle of protection of trust requires that the trustee, who brought into existence a notion of trust in the eye of the trustor, shall not betray such trust and shall comply with the consequences thereof 1 . This principle shall be utilized for the interpretation, completion, limitation, correction and concretization of obligations in a contract. The Court of Cassation ruled in one of its decisions that the applica- tion of Art. 2 of the Turkish Civil Code is mandatory with respect to banking transactions and the contracts concluded with banks 2 . The decision reads: “The compliance with the principle of good faith within the meaning of Art. 2 of the Turkish Civil Code is mandatory when using of the authority to increase the interest rates that was granted to the respondent bank. (…) In other words, it has to be determined whether or not the bank has violated the trust of the trustee. In such case, the court shall, in accordance with the above- stated explanations, determine any unjust behavior of the bank since it is its obligation to oversee the implementation of Art. 2 of the Turkish Civil Code.” (19th Civil Chamber, Decision num- bered 6-2976 and dated 26.03.1996). The reflection of the notion of the protection of trust in the bank- ing law is the state supervision on banking, and the fact that the banks can only operate if they are granted certain permissions by the Agency, and comply with certain criteria laid out under the Banking Law. A state-granted permission shall be the indicator of the existence of the minimum qualifications and minimum sufficiency for the continuation of the operations of the bank in question, since to the contrary shall require the suspension or cancellation of the permission. Although this may seem to be a burden on the banks’ part, Banking LawArt. 74 is in favor of the banks, and prohibits knowingly causing any impairment of a bank’s prestige, fame and fortune, or any unfounded news to be reported to this end. Hence, the trustworthiness (in other words, the prestige) of the banks are legally protected. 1 Battal , Banks’ Legal liability in the Light of Their Identification as Trustworthy Institutions, Banka ve Ticaret Hukuku Araştırma Enstitüsü Yayınları, Year: 2001, p. 34. 2 Battal , p. 36.