Türkiye proposes 10-year term limit for bank CEOs following ponzi scandal
A drone view shows business and financial district of Levent, which comprises banks headquarters and popular shopping malls, in Istanbul, Türkiye. (AFP Photo)
Türkiye’s Banking Regulation and Supervision Agency (BDDK) is preparing a proposal to limit the tenure of bank CEOs to 10 years, a measure introduced in response to a high-profile Ponzi scheme scandal that rocked the country’s financial sector.
The draft regulation, seen by Bloomberg, outlines a maximum 10-year tenure for CEOs at the same bank.
Deputy general managers would also face a 10-year limit, with a possible extension of up to five years, subject to regulatory approval.
Ponzi scheme scandal sparks reform
The proposed regulation follows accusations of a $44 million Ponzi scheme involving high-profile investors, including former FC Barcelona and Inter Milan football players.
The scandal was allegedly orchestrated by Secil Erzan, a branch manager at DenizBank, a Turkish unit of Emirates NBD PJSC. Investors were promised returns as high as 250% on their dollar deposits.
In November, prosecutors also indicted Denizbank CEO Hakan Ates, who had been in charge since 1997, for his alleged role in the scheme.
However, the court returned the indictment, citing insufficient evidence about the victims and financial gains.
Ates, aged 65, stepped down in December amid growing scrutiny.
Proposed regulations aim for industry overhaul
If implemented, the regulation would require banks to comply with the new tenure limits by June 30, 2025.
Additionally, the proposal introduces a four-year limit for branch managers at the same institution.
According to industry analysts, this could trigger significant leadership changes across Türkiye’s banking sector.
Impact on Türkiye’s banking sector
A survey conducted by CNBC-e reveals that four out of 44 bank CEOs in Türkiye have already exceeded the proposed 10-year limit, indicating an immediate need for leadership changes in approximately 9% of banks.
Over the next two years, an additional seven banks would require CEO transitions, raising the turnover rate to 16%. In three years, three more CEOs are expected to reach their tenure limits.
By 2029, if the regulation takes effect without modifications, 41% of current bank CEOs—equivalent to 18 executives—would need to be replaced.
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