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Principles regarding the Corporate Governance of Payment
Institutions
Payment institutions must have a developed management network
due to their activities. Accordingly, Articles 16-21 of the Regulation on
Payment Services sets forth the corporate governance of payment insti-
tutions. The board of directors of payment institutions may not be
comprised of less than three persons, including the general manager.
The board of directors is responsible for determining strategies and
policies with respect to the activities of the internal control and risk
management units of the payment institutions, determining policies
with respect to the management of information systems and determin-
ing, managing, monitoring and reporting the relevant risks. The
Regulation of Payment Services establishes special conditions for gen-
eral managers. In accordance with this regulation, a general manager
must have at least 7 years of professional experience in management or
finance, and have an undergraduate education in the related field.
Moreover, the members of the board of directors and the general
manager must satisfy certain conditions in order to be eligible to sit on
the board of directors of a payment institution. The members of the
board of directors and the general manager must submit the documents
listed under Art. 18 of the Regulation on Payment Services, as well as
providing certain undertakings.
Internal controls constitute an important part of corporate gover-
nance in payment institutions. In order to carry out activities effective-
ly, and procure unity between systems, an internal control system must
be established. Another system to be established along with internal
controls is the risk management system. The risk management system
aims the identification, measurement, supervision, control and report-
ing of all risks that the payment institutions may be exposed to in line
with the scope and structure of the activities of the payment institutions.
In this regard, one of the most important regulations that the pay-
ment institutions are subject to are inspections which are conducted by
the Agency. The Agency is entitled to conduct on-site inspections and
distant surveillance of the payment institutions. This provision aims to
control the activities of the payment institutions, as well as to procure
the regular performance of activities.
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