Abstract:

The Ottoman State is accepted as the civilization of waqfs so that the borrowing by people who needed cash was provided by waqfs that had cash as capital. These waqfs operated their capitals within the limits that were drawn by Ottoman ulemas under the effects of interest ban in Islamic states. These waqfs can be thought of as the pioneers of modern Islamic financial institutions. The cash waqfs (CWs) became the factor of stability in the Ottoman financial system with controlling high usury rates and determining the market interest rate. Today, the participation banks as fulfill the function of interest-free financial institutions. The participation banks that bring together the people who want to borrow money without interest and the people who want to operate his capital in accordance with Islamic rules (with halal ways) differ from cash waqfs in some respects. Even though they follow similar financial methods, the difference in their purposes and other characteristics as interest-free financial institutions and the pioneering role of CWs will be examined in this study.

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