Abstract
The Islamic finance has an old existence in Turkey. Naturally spread under Ottoman Empire, it had disappeared between the promulgation of the Republic (1923) and the 1980s. Indeed, Islamic Banks were called “specialized financial institutions”. But, the Turkish Banking Law (2005) has changed its name to “Participative Bank”, and this law rules all their activities like investment account, deposit, credit and card. In order to highlight their specificities, this chapter exposes not only the different legal rules defined by Turkish Law but also the content of different contracts concluded by Participative Bank.
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Notes
- 1.
H. Tünç, Katilim Bankaciligi, Felsefesi, Teorisi ve Türkiye uygulamasi (in Turkish, our translation: Participative Banks, Their Philosophy, Their Theory and Their Regulation in Turkey), Nesil, Istanbul, p. 175 et s; H. Döndüren, Delileriyle Ticaret ve Iktisat Ihmihali (in Turkish, our Translation: Encyclopedia of Islamic commercial Law and Islamic Economy with Their Legal Sources), Erkam Yayinlari, Istanbul, 1424/2003, pp. 362–366.
- 2.
For example, Turkish authority had closed many Mosques, Koranic schools (madrassa), Sufi places (zawiya) and had forbidden the Appeal for Prawyer (Athan), holding at home Koran, obligating the former Sultans and Scholars to leave the country.
- 3.
The last coup d’état dated 28 February 1997 was against the coalition government headed by the Prof. Dr. Necmettin Erbakan. Regarding the figures, the Islamic economic activities had registered a loss of around several billions of dollars: see N. Erbakan, Davam (in Turkish, our translation: My Involment), Milli Gazete Ankara Kitab Kulübü, 2013.
- 4.
Undersecretariat of Treasury of Republic of Turkey, Prime Minister, Turkey Participation (Islamic) Finance Country Report, November 2016, p. 15.
- 5.
Circular of Prime Minister Services, n° 2015/17.
- 6.
Law n° 83/7506 of the 19th December 1983 on Specialized Financial Institutions; completed by two Decrees of the Economy Minister and one circular of the Central Bank of Turkey in 1984. The Government published more than 20 texts between 1984 and 2004.
- 7.
Undersecretariat of Treasure of Republic of Turkey, Prime Minister, prec., p. 19.
- 8.
Idem.
- 9.
Law n° 5411 of 19 October 2005, OJ p. 25983.
- 10.
Undersecretariat of Treasure of Republic of Turkey, Prime Minister, prec., p. 30.
- 11.
Islamic Financial Services Board, Islamic Financial Services Industry, Stability Report, 2017, pp. 7–10.
- 12.
Turkey Participative Banks Association, Katilim Finans, Revue, June–July 2017, p. 3 and Ernst & Young, World Islamic Banking Competitiveness Report 2016, p. 12.
- 13.
- 14.
Katilim Dünyasi, Katilim bankalarinin bankacilik sisteminde payi yuzde 4.71’e geriledi, Journal of 31 May 2017, https://katilimdunyasi.com/2017/05/31/katilim-bankalarinin-bankacilik-sistemindeki-payi-yuzde-4-71e-geriledi/
- 15.
Ernst & Young, World Islamic Banking Competitiveness Report 2016, p. 12.
- 16.
Idem.
- 17.
Undersecretariat of Treasure of Republic of Turkey, Prime Minister, op. cit., p. 10.
- 18.
Ibidem, p. 11.
- 19.
For example, the number of employees of Albaraka was 400 in 2001 and 3800 in 2017 (Turkey Participative Banks Association, Katilim Finans, préc., p. 32).
- 20.
Ibidem, p. 12.
- 21.
Undersecretariat of Treasure of Republic of Turkey, Prime Minister, prec., 11.
- 22.
Ibidem, p. 12.
- 23.
Ibidem, p. 13.
- 24.
Katilim Bankalari Dergisi (Revue of Participative Banks), n° 2, avril 2017.
- 25.
Turkey Participative Banks Association, Katilim Finans, prec., p. 17.
- 26.
Katilim Dünyasi, Journal of the 1st August 2017: https://katilimdunyasi.com/2017/08/01/katilim-bankalarinin-ortalama-kar-payi-orani-yuzde-8-18-oldu/
- 27.
Katilim Dünyasi, Journal of 12 may 2017: https://katilimdunyasi.com/2017/05/12/altin-hesaplara-en-cok-kar-payi-veren-albaraka-en-az-vereni-ziraat/
- 28.
Turkey Participative Banks Association, Katilim Finans, p. 59.
- 29.
Ibidem, p. 25.
- 30.
Ibidem, p. 38.
- 31.
Ibidem, p. 22.
- 32.
Ibidem, p. 20.
- 33.
Ibidem, p. 21.
- 34.
Ibidem, p. 25.
- 35.
Ibidem, p. 22.
- 36.
Ibidem, p. 21.
- 37.
Ibidem, p. 29.
- 38.
- 39.
Turkey Participatives Bank Association, Katilim Finans, Revue, préc., p. 28.
- 40.
Ibidem, p. 25.
- 41.
Ibidem, p. 25.
- 42.
Classically, the supervisory of banks consists of accountability and financial reports in order to reduce the market risk, credit risk, liquidity risk and rate risk.
- 43.
Article 68 of Banking Law.
- 44.
Law n° 6502 of 7 July 2013 on the protection of consumers.
- 45.
The Law n° 6361 du 13 décembre 2012 on the financial leasing, the factoring and others financing companies is applicable to participative banks. For example, the client who has the quality of a lessee has the same right imposed by Islamic Law.
- 46.
Article 23 de la loi bancaire.
- 47.
Articles 25 to 27 of the Bank Law.
- 48.
Articles 29 to 31 of the Bank Law.
- 49.
Articles 37 to 42 of the Bank Law.
- 50.
Article 38 of the Bank Law.
- 51.
Article 46 of the Bank Law.
- 52.
Article 73 of the Bank Law.
- 53.
Law n° 5187 on the media.
- 54.
Articles 106–110 of the Bank Law and Articles 111–143 which are established through the principle of independence.
- 55.
The last case is Bank Asya which was accused of financing a terrorist organization led by Fethullah Gülen who has tried to bring down the Turkish government on 15 July 2016. The preparators of putsch have tried to occupy the Istanbul Stock Exchange after bombing the Parliament. The coup d’état did not succeed thanks to the resistance of Turkish People. However, there were about 148 dead and more than thousands injured.
- 56.
It is forbidden to offer banking and financial services to a person who does not furnish his name, address, tax identity and all information imposed by the regulation (Article 76 of Bank Law).
- 57.
I. E. Aktepe, Investment Participative Accounts in Participative Banks, in Association of Participative Banks of Turkey, Katilim Finans, prec., p. 64.
- 58.
Idem, p. 65.
- 59.
This article excludes from its scope the participation of the moral or physical persons in the share capital of a private or public company, the payment of sum of money in a waqf, the contributions were paid in the bodies of Social Securities. It’s the same for funds paid in development or investment banking or for funds paid for the operations in financial markets.
- 60.
Decree of the Central Bank of Turkey, 9 December 2006, O.J. 26,371.
- 61.
Article 144 Of Bank Law.
- 62.
I. E. Aktepe, Investment Participative Accounts in Participative Banks, in Association of Participative Banks of Turkey, Katilim Finans, prec., pp. 64–65.
- 63.
Idem.
- 64.
We refer to the Master Agreement of definitive contract proposed by Turkiye Finans.
- 65.
In this section, we refer to the mortgage proposed by Turkiye Finans.
Bibliography
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Cekici, I.Z. (2019). Participative Banking in Turkey. In: Hajjar, M. (eds) Islamic Finance in Europe. Palgrave Studies in Islamic Banking, Finance, and Economics. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-030-04094-9_12
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