Causes and solutions for the stagnation of Islamic banking in Turkey

Yanīkkaya, Halit and Pabuçcu, Yas�ar Uğur (2017) Causes and solutions for the stagnation of Islamic banking in Turkey. Causes and solutions for the stagnation of Islamic banking in Turkey, 9 (1). pp. 43-61.

Text (Causes and solutions for the stagnation of Islamic banking in Turkey) Causes and solutions for the stagnation of Islamic.pdf - Published Version Restricted to Repository staff only Download (560kB)

Abstract

Purpose – This paper aims to evaluate the root causes of stagnation of the Islamic banking sector in Turkey
in three steps and proposes solutions and policy recommendations.
Design/methodology/approach – First, global Islamic banking practices in terms of governance and
instruments are summarised and compared with the Turkish experience. Second, the financial and efficiency
ratios of Turkish Islamic banks (IBs) and conventional banks (CBs) are compared and analysed for the period
2005 to 2015. Finally, the long-term growth strategy of Turkish IBs is evaluated.
Findings – This paper asserts that Islamic banking in Turkey diverges from Islamic banking practices of
prominent countries by not having a Sharīʿah governance framework at either a national or bank level.
Turkey is thus immediately in need of a sound Sharīʿah governance framework. Increasing the variety of
instruments and improving the perception of Islamic banking in the society are other critical points.
Furthermore, regulatory and research institutions specifically focusing on Islamic banking are insufficient. A
large number of financial and efficiency ratios reveal that the efficiency and profitability of IBs fall behind
that of CBs. IBs should improve their business models, operational efficiencies and information technology
infrastructure as these issues are undervalued in their growth strategy.
Originality/value – This study sheds light on the Turkish Islamic banking sector, which is a rarely
studied topic. It is the first study that provides institutional differences of banking practices and evaluates the
efficiency status and growth strategy of IBs in Turkey.

Item Type:	Article
Subjects:	H Social Sciences > HB Economic Theory
Divisions:	Fakultas Syariah > Perbankan Syariah
Depositing User:	S1 SYARIAH IKHAC
Date Deposited:	20 Nov 2020 01:41
Last Modified:	20 Nov 2020 01:41
URI:	http://repository.ikhac.ac.id/id/eprint/728

Actions (login required)

View Item