Profitability of Interest-free vs. Interest-based Banks in Turkey

Ali Soylu and Nazif Durmaz

MPRA Paper from University Library of Munich, Germany

Abstract: Islamic banking is consistent with Islamic law and guided by Islamic economics. They are prohibited from charging or paying interest, and can operate only on the basis of the profit-sharing arrangements. Islamic banking has been gaining momentum on a global scale for the last 30 years. It is estimated that the assets of Islamic banks in Turkey will exceed US$25 billion in the next decade and will make up 10% of the total banking system. Therefore, this study compares Islamic banks with interest-based banks to measure their profitability. It also investigates how Islamic financing techniques are used by Islamic Banks.

Keywords: Turkish banks; interest-based banking; interest-free banking; Islamic banking (search for similar items in EconPapers)
JEL-codes: E43 G21 (search for similar items in EconPapers)
Date: 2012-01-01
New Economics Papers: this item is included in nep-ara and nep-cwa
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