Abstract
Financial systems and companies has become the most important reason in the weakness of world economic system. The formation and development process of the financial structure also constitutes the infrastructure of the world economic system. The path of the financial system and development has led to discuss with the financial crisis in 2008-2011. One of the argument topic in order to reduce problems caused by the conventional banking system is alternative financing systems. In Turkey, the corporations based on profit share system which are named participation based banking attention, if the alternative banking systems are considered. These banks which settle on different principles in the risk distribution of the portfolio acquired are analyzed more nowadays. Participation based banks are placed in almost every regulation related to banking terms and get their legal infrastructure more stable in the banking legislation of Turkey.This study is a 2007-2013 part of research series. We try to find out the place and the importance of participation based banking with the various sub-headings especially in Turkey. We examine the comparative review 2007-2013 data of participation banks which Total Assets, Equity Net Profit, Collected Turkish Currency and Foreign Currency Funds and Bank Loan Funds, figures for the four participation banks in Turkey. We are comparing the total figures with deposit banks for the same period.One of our primary aim in this essay, to study in the framework of the alternatives of the financial companies and options. These options could be stated as a vibrant and viable well established choice as a non-western model- different from the classical western interest based leading banking system in the globe. Moreover, that participation banking systems’ grow and increase with its resourceful bulk of transactions and shares within the financial market. In addition, we intended to delineate the basic functioning structures, rules, norms, principles, procedures, operations of that alternate banking system in the financial market.
Highlights
The set of governing principles for interest free banking in Turkey is dated as the end of the year 1983
When we look at the books of financial institutions generally we can’t see these institutions among the financial institutions (Rose & Marquis, 2009). (Burton, Nasiba, & Brown, 2009) (Mishkin & Eakins, 2009) On the other hand Islamic banks ability to withstand the global downturn has fuelled an expansion of Islamic finance around the world
When we look at the table of growth of assets, it is seen that participation banks provide in the 2007-2013 period according to deposit banks
Summary
The set of governing principles for interest free banking in Turkey is dated as the end of the year 1983. In Turkish their former name Private Finance Institutions, or with the new name, Participation Banks haven’t authorized or empowered to collect deposits but receive fund through special current accounts or profit and loss participation accounts, and utilize fund through methods such as production financially assist, community of profit and loss, financial leasing, buying and selling documents against payment. Even if these institutions are have been permitted in Turkey since 1984, they have been limited in terms of both quantity and scale (Central Bank of Republic of Turkey, 2005). The word “participation” in their name expresses that this type of banking is based on the opinion of participation to profit and loss (The Participation Banks Association of Turkey-FAQ, 2010)
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