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A Comparison between Ottoman Cash Waqfs (CWs) and Participation Banks and Modern Interest-free Financial Institutions

Author

Listed:
  • Bulut, Mehmet
  • Korkut, Cem

Abstract

The Ottoman State is accepted as the civilization of waqf so that the borrowing of people who needed cash was provided by waqfs that had cash as capital. These waqfs operated their capitals within the limits that were drawn by Ottoman ulema under the effects of interest ban in Islamic states. These waqfs can be thought of as the pioneers of modern Islamic financial institutions. The CWs became the factor of stability in the Ottoman financial system with controlling high usury rates and determining the market interest rate. Today, the participation banks as interest-free financial institutions fulfill this function. The participation banks that bring together the people who want to borrow money without interest and the people who want to operate his capital with halal ways are separated from cash waqfs in some respects. In this study, even though they follow similar financial methods, the difference in their purposes and other characteristics of interest-free financial institutions and their pioneer of CWs will be examined.

Suggested Citation

  • Bulut, Mehmet & Korkut, Cem, 2016. "A Comparison between Ottoman Cash Waqfs (CWs) and Participation Banks and Modern Interest-free Financial Institutions," MPRA Paper 76009, University Library of Munich, Germany, revised 10 Jan 2017.
    • Handle: RePEc:pra:mprapa:76009
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    References listed on IDEAS

    as
    1. M.Umer Chapra, 1988. "Towards An Islamic Financial System," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 1(2), pages 1-30, July.
    2. Aras, Osman Nuri & Öztürk, Mustafa, 2011. "Reel Ekonomiye Katkıları Bakımından katılım Bankalarının Kullandırdığı Fonların Analizi [Analysis of Allocated Funds of Participation Banks in Terms of Contribution to the Real Economy]," MPRA Paper 81903, University Library of Munich, Germany.
    3. Ziauddin Ahmad, 1989. "Islamic Banking At The Crossroads," IIUM Journal of Economics and Management, IIUM Journal of Economis and Management, vol. 2(1), pages 23-44, January.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Bulut, Mehmet & Korkut, Cem, 2019. "A Look to Cash Waqfs as an Indicator of Ottoman Financial Mentality," MPRA Paper 94784, University Library of Munich, Germany.

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    More about this item

    Keywords

    Ottoman State; cash waqfs; interest-free financial institutions; participation banks; Islamic finance;
    All these keywords.

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • N20 - Economic History - - Financial Markets and Institutions - - - General, International, or Comparative
    • N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East

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