Issues with Joint Bank Accounts in Turkey

If you have lived in Turkey for a while, you’ve probably got an account with a local bank. It is easy enough to open a bank account if you have a residence permit (or it should be, your experience may vary). You can do it alone or jointly with others. Many foreigners in Turkey are involved in relationships with Turks (for business or pleasure) and open joint bank accounts together. Opening is easy, but what if you want to close your account?  The answer is, “it depends”.

Issues with Joint Bank Accounts in TurkeyIn an individual account, you alone have ownership of the account and can essentially do what you want with it solely. However, in a joint account should be aware of the two kinds: “successive joint account” and “both-to-sign joint account”.

Any holder of a “successive joint account” has the power to execute transactions on their own accord, such as withdrawing cash, closing the account, or transferring the account to another bank branch.  On the other hand, a “both-to-sign joint account” does not allow any single account holder the right to perform such actions without the other account holder’s signature. Long story short, you should open the type of joint account that is right for your situation. This is true regardless of nationality, but as with most things being a foreigner can complicate the consequences of picking the wrong type of joint account.

Issues with Joint Bank Accounts in Turkey

So what if you want to close a both-to-sign joint account and the other account holder(s) doesn’t want to or you can’t reach them? Recently, I worked on just such a case for a foreign client and was disappointed to find just how little large banks in Turkey are willing to help people in this situation.

Imagine that, for some reason, you opened a “both-to-sign joint account” with your partner many years ago and then you broke up, never saw them again and got rid of all their contact information. For whatever reason, you didn’t close your joint accounts immediately but after some time, you decided to close the account. As an account holder, you should be able to exit the account without closing it, meaning that the account will remain open in the other party’s name only rather than with yours.

Issues with Joint Bank Accounts in Turkey

Unfortunately, this is not what even some of Turkey’s largest and most prominent banks apply in practice. They may keep you stuck in the account until you can produce the other account holder, who then must agree to allow you to exit the account. If you can’t produce the other account holder(s), you face being tied to this account for an indefinite period of time because although the bank may acknowledge the illogic, they may not have a solution available in their systems. Even if other party avoids releasing you from the account purposefully or has simply become unreachable, the bank may state that you are stuck.

In this situation, when you contact your bank representative they will likely tell you that they or the bank’s legal department have to check your account agreement with the bank. If they are able to find it, they will tell you that you do not have the power to close or disassociate from the account unilaterally. If they cannot find it, they will say no decision can be made unless you can find and provide your copy of your agreement. In my client’s case, they did not have their copy after so many years and the bank conveniently couldn’t find a copy of their agreement either. Effectively, my client was being forced to remain in an account for which the bank itself had the lost evidence that they had ever agreed to it.

This is another important point when dealing with large institutions in Turkey; do not assume they will always keep copies of your contracts for the full period they have to keep it. It is not uncommon for them to lose common documents, and this is more likely to harm your interests than those of the bank. Bank officials are unlikely to seek out another solution and will keep repeating the same position, which is that you cannot close or disassociate from the account without the other party’s signature. Submitting a petition for special consideration will be likely to receive the same result. You can submit a complaint against the bank to the relevant regulatory authorities, however the process is long and you may prefer pursuing more expedient results.

Issues with Joint Bank Accounts in Turkey

I don’t recommend my friends and clients to open a “both-to-sign joint account” except in business situations in which the ability to access the account unilaterally is undesirable. If you’re in a non-business relationship with someone, you must really consider the risks of being tied to that person through such a bank account. If you really want to open a joint bank account, you should consider the merits of opening a “successive joint account”. However, in such case you should take into account that other party will have same power as you over the account. The other account holder can withdraw cash in any amount so you have to trust them or not open a joint bank account at all.

Importantly, I also encourage you to demand an English agreement (if your English is better than your Turkish) when opening and signing for a bank account. Take your time, be responsible, read and understand your agreement’s provisions, and don’t forget to save a copy of it.

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Melek Barngrover

Melek Barngrover is a Turkish lawyer and travel enthusiast. A former chemist, she lives with her American husband and two cats in Istanbul.

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