Profitability of Interest-free vs. Interest-based Banks in Turkey
AbstractIslamic 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.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 36376.
Date of creation: 01 Jan 2012
Date of revision:
Turkish banks; interest-based banking; interest-free banking; Islamic banking;
Find related papers by JEL classification:
- E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
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- Chong, Beng Soon & Liu, Ming-Hua, 2009. "Islamic banking: Interest-free or interest-based?," Pacific-Basin Finance Journal, Elsevier, vol. 17(1), pages 125-144, January.
- Kenneth Spong & Richard J. Sullivan & Robert DeYoung, 1995. "What makes a bank efficient? : a look at financial characteristics and management and ownership structure," Financial Industry Perspectives, Federal Reserve Bank of Kansas City, issue Dec, pages 1-19.
- Pilloff, Steven J, 1996. "Performance Changes and Shareholder Wealth Creation Associated with Mergers of Publicly Traded Banking Institutions," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 28(3), pages 294-310, August.
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