A segment of the public in Turkiye and around the world stays away from interest income. For this reason, funds that do not go to classic banks remain idle. This is a loss both from the point of view of the general economy and from the point of view of the saver. Participation banks were established as an innovation in the financial sector in order to bring funds that do not go to classical banks due to interest concerns into the economy and to help savers store and evaluate their funds safely. At the establishment stage, methods have been determined to evaluate the funds collected by these banks in accordance with the opinions of the committees formed by experts in their field and by taking examples from their practices in the world. A consensus has been formed that the earnings obtained by these methods differ fundamentally from interest.

Participation banking is a topic that has been discussed on the World financial agenda since the 1970s. The first application in Turkiye was initiated by AIbaraka Turk and Faisal Finans Kurumu in 1985. Interest-free banks are still operating in more than 60 countries with their subsidiaries and branches. There are also western institutions that have established units that operate according to interest-free principles within their structures. Examples of these are institutions such as Citibank, HSBC Bank, Union Bank of Switzerland, Kleinwort Benson, ANZ Grindlays, Goldman Sachs. The first independent interest-free bank established by Western banks is the Islamic Investment Bank, which was established by Citibank in Bahrain in 1996 with a capital of USD 20 million.

Participation banks are banks that operate in the financial sector, finance the real economy and provide banking services. Participation banks evaluate the funds they collect from savers in trade and industry within the framework of interest-free financing principles and share the resulting profit or loss with savers. The word “participation” in the names of these banks indicates that the type of banking we do is a banking based on the principle of participation in profit and loss. Funds collected in term accounts based on TL, USD and EURO are evaluated using Corporate Financing Support, Individual Financing Support, Financial Leasing, joint investments and profit/loss partnership investment methods. The supply of raw materials, commodities, real estate, machinery and equipment needed by trade and industry is provided in accordance with the principles of participation banking, that is, through the financing of the purchase and sale of goods Jul. In addition, other banking services that the public may need are also provided.

Participation Banking is a type of banking that does not use the "interest" tool in fund raising and distribution transactions, but instead applies the profit and loss participation model in fund raising, and the supply, rental, profit/loss partnership investment models of goods and services instead of direct cash to the customer in the use of funds. In order for a return to be interest, the gain must be determined in advance and money must be made in exchange for money. For example, classical banks collect money from depositors in exchange for a certain interest and offer it to those in need as a cash loan at the announced interest rates. In the dividend, there is no specific income commitment when collecting money from the public, nor is there even a main money guarantee. The difference in loans is as follows: participation banks do not pay cash directly to the customer when making loans. They pay to the seller who sells the goods that they need in exchange for the invoice and for the business of the credit customer. After making the payment, they debit the customer by adding their profit share to it and collect it from the customer in installments. Thus, financing is made in the form of futures sales by purchasing the goods in advance and paying a profit share on it, and the transaction is realized in the form of trade, not in the form of loan (cash payment). This method is also an ideal financing method that prevents the loan from going to non-purposeful, inefficient and speculative areas and records the informal. On the other hand, participation banks do not allow loans to some subjects, for example, those engaged in the production and sale of alcoholic beverages and tobacco. They do not invest in interest-bearing instruments, they do not place interest-bearing transactions.

The profit to be distributed to savings accounts deposited on a term basis depends on the level of net profit generated as a result of fund allocation activities. The funds collected are collected in USD, EUR and TL pools according to the type of money. The customer who wants to use the fund is provided with funds from the relevant pool according to the type of money requested and maturity group, and the profit (or loss) arising from this transaction is also distributed to the relevant pool in principle. The distributed profit is calculated on a daily or weekly basis and announced at the beginning of each week.

It is in no way possible to disclose in advance the profits to be distributed. Profit share announced in newspapers or branches are not a table showing the profits to be distributed in the future. If you look carefully, the announced figures show the profit share formed and distributed according to the maturities as of the previous weekend. It is announced for the purpose of informing customers. it is not a forward-looking commitment.

This question or doubt, which is expressed from time to time in many circles, is not primarily due to correct information. For one thing, while there are large interest differences even between banks, it does not give the right results to generalize the accidental proximity between profit share and interest rates in some periods and Decipher some Decrees from there. On the other hand, banks determine the interest rate that they will give at the stage of depositing money. However, participation banks evaluate the money over the valid profit margins and share what they have earned. Since it is absolutely impossible to determine in advance, there is no such thing as following the banks anyway. Since the real economic market is being worked in very different sectors and within the profit limits required by the economy, it is already economically impossible to go outside the normal earnings course. Moreover, even if the profit share distributed are very close to the banks' interest rates, this does not mean that the work done is the same.

For example, whether the customer has deposited 10 thousand TL with a 1-month term to any branch of the participation bank. Thanks to the programs available in the computer system, a percentage of the total savings available in accounts with a term of 1 month is calculated at the time the money is deposited. It is a kind of stock ratio. And from the profit generated as of weeks, profit is distributed to the account at this share rate.

There has been a false belief in the public opinion that these banks have not caused any losses at all. Loss is as natural and inevitable as profit in commercial life. It is also not possible for them to make a profit from every transaction they make. However, unlike an ordinary commercial institution, Participation banks work with thousands of companies from very different sectors throughout Turkiye. Just as they have the opportunity to choose the companies they will work for, they also receive the necessary guarantees after all kinds of intelligence. They do not work with any company they do not trust. Despite this, some transactions may cause damage due to the inevitable risks of commercial life. For example, a loss occurs if the customer is unable to pay his debt because his financial situation has deteriorated, or if the profit/loss partnership project results in a loss. However, the losses arising from some jobs are offset from the profits from hundreds of other jobs and the remaining net profit is distributed. This, in turn, can reduce the distributed profit share by the most. Participation banks may distribute thirteen TL to their customers instead of distributing fifteen TL profit per thousand TL per month. So, so to speak, since not all eggs are placed in one or several baskets and distributed to hundreds or thousands of baskets, the damage to the eggs in a few baskets does not affect the result very much.

Here, the price determination criteria that play a role in normal commercial life are taken into account exactly. Participation Banks generally determine the profit margin they will receive from the funds they use by taking into account the following conditions:

* The rate of profit on the market of the work performed or the goods sold, the advance and forward trading price,

* The amount of money (purchasing goods or investment power) held by Participation Banks,

* Bargaining power of the customer to whom the work is done (scale, degree of robustness, volume of work done, continuity of the customer and other benefits provided to the bank)

* Inflation rate,

* the cost of alternative financing sources that the customer can turn to, the general situation of the sectors studied,

* The profit limits of the savers' expectations are determined by a general assessment and the profit limits are changed from period to period according to the conditions. Since the country's economy is a whole, it is not possible to detect profits far below or far above the profit limits that occur in the market here. After all, activities are carried out in the real sector, and the market determines the profit margins.

Participation banks inspect the addressee company while providing financing support, establishing profit and loss partnerships or making financial leases. He makes his intelligence and analysis in terms of finances and morale, in terms of experience and success at work. It allocates a limit to the companies that it considers solid and workable, according to the available data and the diameter of the company, and works continuously within this limit. As collateral for the debt of the counterparty, it can only be satisfied with the signature of the firm and the partners, as well as, if necessary, or according to the state of the market, a guarantor, mortgage, letter of guarantee, etc. he can request financial guarantees.

Each participation bank has one or several correspondent banks in the country. This correspondent can open an account by sending money to any participation bank branch free of charge through banks, money can be withdrawn from the accounts, their check can be collected, money transfer can be made, money transfer can be requested. In addition, money can be delivered all over the country with the EFT system. In today's technology, this problem is easily solved. There is a widespread correspondent bank network abroad, and all kinds of external transactions can be carried out very easily.

According to the Banking Law, TL 200 thousand of the principal and profit share amount per person of the savings collected in private current and profit and loss participation accounts on behalf of real persons in participation banks is under the guarantee of the Savings Deposit Insurance Fund. The insurance in question will be taken into account separately for each participating bank. Premiums are deposited by participation banks to this fund every three months at a certain rate over the secured sections of existing accounts in order to insure the accounts, and these premiums are reflected in the profit participation rate of the account holders.

Securities held in the custody of Participation Banks, even if the check report card has not been delivered, amounts contained in accounts opened on behalf of customers to whom they have issued a check report card, transfer fees and profit share related to participation accounts, all types of participation funds, escrow and receivables, including those that are not sought within 10 years starting from the date of the last request, transaction, any written instructions of the rights(account) holder, are subject to the statute of limitations.

Banks are obliged to notify the rights holders of all kinds of participation funds, escrow and receivables that have expired within one calendar year and the amount of 50 Turkish Liras and above by registered letter with refund until the end of January of the following calendar year that their accounts will be transferred to the Savings Deposit Insurance Fund if they do not apply.

There is no such warning obligation for accounts, receivables and deposits below 50 Turkish liras.

February April, all kinds of participation funds, escrow and receivables that have expired, both above 50 TL and below this amount, are announced on each bank's own website for 3 months (until the end of April) from the beginning of February. In addition, each bank is obliged to announce that these lists have been announced on its website in the 2 newspapers with the highest circulation, which are published throughout Turkiye until the 15th day of February, for a period of 2 days.

May May be transferred to the Savings Deposit Insurance Fund until the end of May with profit share from all kinds of expired participation funds, escrow and receivables announced by the banks on their websites that are not sought by the rightful owner or his heirs until the 15th day of May. The aforementioned participation fund, escrow and receivables, as well as profit share, are recorded as income by the aforementioned Fund as of the date of transfer.

Therefore, the participation fund, escrow and receivables that have expired May be requested by the rightful owner or heirs from the relevant bank no later than the 15th day of May, when the obligation to transfer these accounts to the Fund begins. After this date, there is no possibility to request these accounts from the relevant bank or Savings Deposit Insurance Fund.