Head-Module Title: Participation Bank in Turkey
Participation Banks Founded in Turkey
Special finance houses adopted by Turkish society in short time showed a rapid improvement in terms of collected funds, volume of work and project capacities. These finance institutions are:
Albaraka Türk Special Finance Institution Inc.: The first finance institution of interest free banking in Turkey, Albaraka Türk Participation Bank, finished its foundation in 1984, and began its operations as of the beginning of 1985. Its name is still Albaraka Türk Participation Bank. (Albaraka Türk – About Us, 2010)
Kuveyt Türk Evkaf Finance Institution Inc.: Kuveyt Türk, founded in 1989 at the status of Special Finance Institution, changed its name in May 2006 as Kuveyt Türk Participation Bank Inc (The History of Kuveyt Türk, 2010).
Anadolu Finance Institution Inc.: It began its operations in 1991 in Ankara. It is founded with domestic capital.
Faisal Finance Institution Inc.: Founded in 1985. In 2001, Faisal Finance Institution Inc. It has been taken over by Ülker Group, its trade name was changed to Family Finance Institution Inc. In 2005, Anadolu Finance Institution Inc. and Family Finance Institution Inc. merged under the name of Türkiye Finance Participation Bank Inc.
İhlas Finance Institution Inc: Founded in 1995. As a result of the 2001 economic crisis, it went on bankrupt and its official authorization has been cancelled. That bank still has been in liquidation, since 2001. We should underline the fact that the bankruptcy of this finance bank negatively influenced the other participation banks, too.
Asya Finance Institution Inc: Founded in 1996. After the Act no. 5411 came into effect, its name has been changed to Bank Asya Participation Bank.
After the Banking Act no. 5411 accepted on October 19, 2005 and published in the Official Journal on November 1, 2005, the name “Private Finance Institutions” has been changed to “Participation Banks”. And the name “Private Finance Institutions Association” has been changed to “Participation Banks Association of Turkey” which has also created their own insurance funds so as to prevent their depositors’ loss; because of any of its member’s probability of bankruptcy at which they could compensate similar to other banks. This insurance include some limits like deposit banks insurance.
Participation banks operating today among the institutions mentioned above are Albaraka Türk Participation Bank Inc., Kuveyt Türk Participation Bank Inc., Asya Participation Bank Inc. and Türkiye Finans Participation Bank Inc.
