on Monday completed a legal infrastructure on participation banks to help them
provide services for their customers in accordance with interest-free finance
principles, sources familiar with the issue said.
the new infrastructure, the compliance processes with the interest-free
principle, which the sector has carried out since its establishment, are now
put into legal legislation in a governance framework.
works are carried out in cooperation with the Banking Regulation and
Supervision Agency (BDDK) and the Participation Banks Association of Turkey.
tasks include the establishment of the central advisory board, determination of
binding standards, the formation of an advisory committee at each bank and
establishment of control and audit mechanisms to ensure compliance with the
main task of the central advisory board is to eliminate the different
implementations of the participation banks.
the event of a dispute between participation banks and their customers, the
board has the authority to change the decisions taken.
each participation bank must have its own advisory committee.
board and advisory committees aim to ensure that the banks continuously abide
by the principles and standards and to provide assurance to the relevant
parties, especially to customers.
have to report their control and audit activities quarterly to the top
management of the institution.
taking part in compliance and audit processes must have a postgraduate degree
in interest-free finance or alternatively receive certified training.
interest-free banking sector has developed rapidly in the world in the last 20
has positioned itself to be a hub for participation banking and Islamic
this year, Moody's credit rating agency announced that Turkey's Islamic banking
assets are set to double within a decade as government initiatives drive growth
in the sector.