Participation Banking System

Participation banking, in essence, refers to the financial systems and institutions that carry out their banking activities with the "Non-interest Principle" and that carry out fund collection, fund allocation and other banking transactions in accordance with the Interest-Free Banking Principles and Standards and the decisions of the Interest-Free Banking Advisory Committee.

In participation banking activities; Banking transactions are carried out in accordance with the Principles of Interest-Free Banking, based on contracts such as Labor-Capital Partnership, Capital Partnership, Consumption Lent, Investment Power, Financial Purchase and Sale, Leasing, Surety, etc.

Within the scope of the Regulation on Credit Transactions of Banks published in the Official Gazette, Funding Methods of Participation Banks, Sales Methods, Leasing Methods, Partnership Methods, Proxy Methods and Other Methods (Types of Borrowing, Bail, Guarantee, Promise, Reward Promise and other methods to be determined by the Board) have been determined as the services that can be offered within the scope of Participation Banking.

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Within the scope of the relevant legislation, participation banks cannot provide cash financing to their customers for the purpose of generating income, and in the participation banking system, the payments to be made due to the documents issued by the seller on behalf of the customer within the scope of transactions based on sales methods ( Financial Purchase and Sale, Entailed Estate, Negotiation, Cash Sale, Charge Sale, Finding Cash, Work Contract) are made through the financing bank and shown in the bank's records, and a copy of the purchase and sale document is preserved in the bank.

Within the scope of the Communiqué on Compliance with Interest-Free Banking Principles and Standards published by the Banking Regulation and Supervision Agency in the Official Gazette dated 14 September 2019 and numbered 30888, the procedures and principles regarding the structures and processes they will establish in order to operate in accordance with the principles and standards of Interest-free banking have been regulated.