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COMPETITION LAW
159
Bankasi to be submitted within Eregli Demir ve Celik Fabrikalari T.A.S.’s
(“Erdemir”) 2005 Wage Payment Tender.
Wage / Promotion System
Pursuant to the current legislation in force, private institutions are
obliged to procure direct deposit of wages disbursement service from
banks. As for public institutions, they get this service for a period between
two and five years from banks which make the most appropriate -cost-
effective and convenient- proposals within the wage disbursement tender.
Procurement of such service is an important revenue stream for banks
to strive for growth in their retail banking division. Indeed, banks may
generate income by way of depositing the wages- usually allowing around
1 – 2 days wage standby period in their Deposit Funds. By cross-selling
other ancillary services and financial products to the payees, the banks
may boost their incremental profits significantly. Hence, banks make
promotion offers to employer institutions to be able to streamline wider
banking services as means of electronic wages disbursement services.
Nevertheless, the amount of the promotions offered to consumers varies
from institution to institution. As a matter of fact, banks determine and
measure the amount of the promotion on the basis of the profit margin
that they will derive from the employer institution.
Relevant Market
Relevant Product Market.
The Board determined the relevant product
market as the “personal (high street banking) banking services” market.
Indeed, the banking sector principally provides brokerage services on
transfer of funds between account owners and investors. Within this
scope, wage payments made by institutions correspond to an important
resource for banks.
Furthermore, banks have also the possibility to reach a large number
of customer portfolio through direct deposit wage payments system. As a
matter of fact, a bank which reaches an agreement with an institution, first
of all, cross-sells a bank card to the institution’s employees in connection
with their deposit accounts and then commercializes personal banking
products such as credit card, consumer credit loans/ car finance/ housing