Participation banks are not an alternative, but an integral component of the Turkish banking system. They have brought the idle funds of interest-sensitive clients into the system, and these banks have provided alternative financial opportunities to manufacturers and businessmen.
Bank Asya is the leading participation bank in Turkey with an asset size of TL17 billion, 200 branches, 4,500 employees, and 3.5 million domestic clients. By the end of 2011, almost 53% of its shares were traded on the Istanbul Stock Exchange (İMKB).
It is possible to identify an increase in investments made by participation banks in line with the economic growth of Turkey. Bank Asya, for example, is in the process of establishing a new private pension and life insurance company that will manage its funds in compliance with Islamic principles.
SUITS THE MARKET
In the participation banking arena there are many products that suit the needs of the Turkish market. We now need to develop these products. Furthermore, developing qualified personnel is a challenge.
UNIQUE & POSITIVE
There were some gold products traded on the Stock Exchange but ours, called Gold Plus, is the first one that operates without interest products. It has had a positive reception since its launch. We hope to increase the quotation and we have plans to replicate this with products similar to gold in the near future.
We have succeeded in attracting long-term financing for the first time in the history of participation banking. We can now finance investors and entrepreneurs that are going to invest in factories and generate jobs, adding to the production of the economy.
The Participation Banks Association of Turkey (TKBB) is a banking union working with its members, although we have the same regulations as the Banks Association of Turkey (TBB), with which we have good relations. We also work closely with the banking authority, the Banking Regulation and Supervision Agency (BRSA).
We have a very strong and unique system. The government and the banking authority regulate this kind of banking in Turkey; that is why we will be successful. We are trying to attract funds and finance participation banks through the issue of sukuks, which is a practice becoming more common in the Gulf region.
TIME TO GROW
There is a lot of competition between the participation banks and conventional banks. We think the participation banking system will be more successful here, even though this is a new model in Turkey and needs time to grow.
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