Abstract:

Islamic financial institutions continue to gain importance at global scale. The trust-inspiring structures of these institutions have become even more evident during the crisis periods experienced in recent years. In this study, it is aimed to examine the ancient examples of interest-free finance, the emergence of modern Islamic financial institutions in in Turkey, and the current sitiation of Islamic (participation) banking in Turkey. Financial analysis was made with participation banking basic ratios. Interest-free finance practices have been dealt with holistically from past to present by giving the subjects in a certain order. According to the results of the analysis, it has been understood that participation banks are in a weak position in the sector in terms of loan and equity ratios, and they contribute more to the sector in terms of employment than traditional banks. In addition, Sukuk draws attention as a rising Islamic instrument. It is hoped that the research will contribute especially to those who are interested in the past and present of interest-free finance in Turkey.

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