Munich Personal RePEc Archive

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

Soylu, Ali and Durmaz, Nazif (2012): Profitability of Interest-free vs. Interest-based Banks in Turkey.

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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.

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