State-owned Ziraat Bank has announced via the Public Disclosure Platform (KAP) that it submitted an application to the Banking Regulatory and Supervisory Agency (BDDK) for a participation banking license on the 29th August.
In its statement Ziraat Bank stated that it will not purchase Bank Asya, but instead will establish a participation banking subsidiary with another name and balance sheet. The capital contribution for this participation bank will be made by the Treasury. Ali Babacan, the Turkish deputy prime minister, said that capital contribution from Treasury will be a good beginning for interest-free banking.
Katılım Emeklilik is another example of an organization formed on the principles of interest-free banking. This new institution conducts insurance transactions similar to participation banking principals. Turkish participation banks Albaraka Turk and Kuveyt Turk have an equality partnership in the operator. Katılım Emeklilik is the only insurance company in Turkey to obtain licences for interest-free life insurance and interest-free individual retirement.
Fahrettin Yahşi, CEO of the Katılım Emeklilik, is positive that the new entity will fill the vacancy in the interest-free retirement and insurance space and that they would be a reliable alternative for the insurance sector. Yahşi also stated that as there is a significant requirement in the sector, Katılım Emeklilik will meet the customers’ expectations and needs.
Katılım Emeklilik is an important milestone for the people who are interested in Islamic banking and interest-free banking. In every foundation phase, Katılım Emeklilik strictly complies with international Islamic finance principles.
Ali Ceylan is a partner at Baspinar & Partners Law Firm. He can be contacted at
[email protected]
.