Institutional Brief History

Brief History

BRIEF HISTORY OF THE UNDERSECRETARIAT OF TREASURY

Institutional roots of the Undersecretariat of Treasury date back to Sultan Mehmet the Conqueror's Period of Ottoman Empire. After Treasury in Ottoman Empire underwent some phases, it took its final structure with the establishment of Treasury Pay Office under the Ministry of Finance (Maliye Nezareti) in the year 1863. Treasury Pay Office fulfilled the classic treasury functions defined as equalization of the state revenues and expenditures by time and place, namely treasury operations, before the establishment of the Central Bank as follows:

Cash was transferred from the administrative units of the province having cash surplus to the ones having cash deficit. The result obtained by this way was combined with the province's own accounts and the cash situation of the province was identified. When a province had cash surplus, this surplus was sent to the Treasury; when a province had cash deficit, then cash was requested from the Treasury.

In this period the Treasury fulfilled the cash transfers usually via mail. This transaction was carried out by Ottoman Bank in places where its branches were available. Ottoman Bank opened a current account for the Treasury with franchise agreement. Pay Office transactions, on the other hand, were undertaken by financial departments.

In the Republic Period, Treasury Pay Office kept its position under the Ministry of Finance (Maliye Vekaleti) until 1927. It was turned into Directorate of Treasury Pay Office and Cash Transactions by the Budget Law concerning with the year 1927. Treasury, which was turned into Directorate of Cash Transactions with the Law No 1452, dated on May 18, 1929 and into Directorate of Cash Operaitons with the Law no 2996, dated on May 29, 1936, and finally it was turned into Directorate of Treasury with the Law no 4286, dated on August 10, 1942.

Directorate of Treasury was united with the "Organization of International Economic Cooperation" under the name of "Directorate of Treasury and General Secretariat of International Economic Cooperation (HAZMIIT)" by the Provisional Law no 13, dated on July 6, 1960. Then it was turned into the Prime Ministry Undersecretariat of Treasury and Foreign Trade (HDTM) by the Decree no 188, dated on December 13, 1983. The Undersecretariat undertook the functions of the chairmanships of Public Finance, Foreign Economic Relations and Banking and Exchanges. Then these units were organized as General Directorates by the Decree no 232, dated on June 8, 1984. This Decree was legalized by a Decree no 3274, dated on April 4, 1986 with some minor amendments. This structure was changed once again with the Decree no 376, dated on May 4, 1989 which enhanced the duties and functions of some sub-units and made them main service units.

Central Organization of the Undersecretariat was changed once again by the Decree no 436, dated August 14, 1991 and got the Chairmanships of Incentives and Implementation, Foreign Capital and Free Zones, which were formerly under the structure of State Planning Organization, under its structure as General Directorates.

Finally HDTM, which was re-organized with the Decree no 508, dated on September 16, 1993, underwent another structural change. Having been separated from the Undersecretariat of the Foreign Trade with the Law no 4059 dated on December 9, 1994 and it reached its present name and structure taking the name of "Undersecretariat of Treasury".

The Banking Regulatory and Supervisory Board (BDDK) started to operate as of August 31, 2000 and the General Directorate of Banking and Exchange's units which are related to banking moved to this Institution together with its personnel. Moreover, the authority to organize and supervise the activities of factoring, financial leasing and consumer financing companies, which was formerly under the duty and responsibility area of the General Directorate of Banking and Exchange, was handed over to BDDK as of the January 1, 2006 as per the Law no 5411.

Deputy General Directory position responsible for risk management was created under the General Directorate of Public Finance by the Law No 4749 dated on April 9, 2002 on "the Regulation of Public Financing and Debt Management" and the bases and procedures regarding the coordination and execution of debt and risk management were organized within this scope.

Finally, the Central Finance and Contracting Unit was set up as a unit under concerned the Undersecretariat of Treasury on March 31, 2006 and it executes the transactions regarding general budgeting, tendering, signing contracts, payment, accounting and financial reporting of the procurements of services, goods, works and grant operations, carried out within the framework of the programs financed by the European Union in Turkey.