The Advisory Committee carries out its activities under the Board of Directors in accordance with Article 4 of the Communiqué on Compliance with the Principles and Standards of Interest‑Free Banking published on 14 September 2019. In the organizational structure, the Advisory Committee, which carries out its activities under the Board of Directors, acts in accordance with the principle of independence while making its decisions.

Within the scope of Compliance with the Principles and Standards of Interest‑Free Banking, the organizational structure of Ziraat Katılım consists of the Advisory Committee and the Advisory Committee Coordination Service Management departments. The Compliance and Secretariat activities are carried out by the Advisory Committee Coordination Service Management under the Internal Control and Compliance Department.

 In accordance with the Communiqué on Compliance with the Principles and Standards of Interest‑Free Banking, the Advisory Committee prepared this report in order to provide information on the activities during the period to be included in the annual report of Ziraat Katılım and to evaluate the compliance of the Bank’s activities with the principles and standards of interest‑free banking.

The Advisory Committee Coordination Service carried out its 2020 activities within the scope of business plan requirements and interest‑free banking principles and standards. Within the scope of the Communiqué on Compliance with the Principles and Standards of Interest‑Free Banking, the Advisory Committee Coordination Service prepared its annual program with the Advisory Committee, and in this context, it planned to hold meetings at least twice a month.

During the 2020 operating period, 36 Advisory Committee meetings were held and 78 decisions were taken. These decisions taken were announced throughout the Bank by the Advisory Committee Coordination Service. Afterwards, compliance checks were made.

The Advisory Committee met the Audit Committee to discuss the internal audit findings as stipulated in the communiqué and negotiate the actions to be taken. In these meetings, the reports prepared on interest‑free banking compliance and audit activities and the actions taken for the findings included in the reports were discussed.

Based on the information and documents presented to the meeting agenda, the Advisory Committee conducted examinations and observations on the following issues within the scope of its powers and duties;

a) Interest‑free banking principles and the standards and their implementation,

b) Compliance of internal regulations with interest‑free finance principles and standards,

c) To evaluate and approve the standard contracts and annexes regarding the Bank’s products and services in terms of interest‑free banking principles and standards.

In view of the reporting, internal negotiations and other issues regarding the implementation of the Advisory Committee decisions, the following were observed;

a) The necessary sensitivity has been demonstrated regarding compliance with the decisions of the Advisory Board and the Advisory Committee,

b) The standard contracts and their annexes, transactions and relations regarding Ziraat Katılım products and services, which were examined between January 1, 2020 and December 31, 2020, are compliant with the decisions of the Advisory Board and the Advisory Committee,

c) Any revenues obtained from any sources and means which are not compliant with the Principles and Standards of Interest‑Free Banking are calculated with the technological infrastructure within the framework of the decisions of the Advisory Committee, and this revenue, which is purified, is spent in ways that are considered appropriate by the Advisory Committee

d) A sound surveillance and control mechanism was established in order to ensure that participation accounts are managed in line with the interests of the account holders, and the profit distribution system is managed by expert personnel,

e) At the point of implementation of the decisions taken, compliance is observed and Internal Audit activities are also carried out,

f) It has been observed that training and educational seminars were organized for the Bank’s personnel in order for the establish and develop the Interest‑Free Banking culture within the Bank.