Navigating the Islamic Finance in Turkiye – Legal Analysis of Shariah Compliant Participation Banks

Saurabh Sood

Mary Sabina Peters

 

Abstract: This note explores the challenges confronted by the participation banks in Turkiye, and regardless of the exponential rise of the participation banks in Turkiye, the area needs comprehensive investigation. This makes the present research an important contribution to the current literature. Seven pivotal issues have been identified during the course of study which need immediate attention to make the participation banks viable and sustainable. It is emphasised that an international perspective is embraced along from aligning the working of the participation banks with global Shariah standards. The note touches upon the regulatory framework responsible for the participation banks and advocates the synthesis of Shariah governance and corporate governance. This may be achieved by establishing Shariah boards in the participation banks that may help in complying with Shariah principles. The deprivation of Islamic bank in global presence and practice further exacerbates the situation because there is no standard template that can be used to expand the presence of the participation banks in other jurisdictions. Dispute resolution forms part of success of any institution and participation banks are not an exception to this. The study emphasises on the need for specialised Shariah benches in courts which will have expertise in hearing matters on Islamic finance. The study hence provides an influential overview of the challenges and offers solutions to promote sustainable growth of the participation banks in Turkiye.