Legal Structure Now in Place to Support Turkey’s Participation Banks

On the 5th of October 2020, Turkey was reported to have completed legal infrastructure pertaining to its participation banking industry, according to anonymous sources as cited by local media. Under the new legislation, compliance processes based on interest-free principles that are practised in the sector, have now been put into a governance framework, jointly developed through a collaboration between the Banking Regulation and Supervision Agency, and the Participation Banks Association of Turkey.

Some of the guidelines under the new framework include the establishment of a Central Advisory Board (CAB), determination of binding standards, a requirement to form an advisory committee at each bank, as well as the developm...