Vakıf Katılım

Since the 1980s, participation banking has become a significant player in the Turkish financial sector. Unlike traditional deposit banks, participation banks solely engage in profit-loss sharing, avoiding all interest-based transactions. Although the roots of cash waqfs in the Ottoman period cannot be precisely determined, the earliest known examples date back to the early fifteenth century. Money foundations had an active role in financing until the late Ottoman Empire, despite controversy regarding their legitimacy. Following the Empire’s decline, these foundations continued to operate until they lost their autonomy and were placed under state control. Upon the establishment of the Turkish Republic, the Ministry of Foundations assumed administrative control of a considerable portion of these foundations. In 1954, VakıfBank was founded. Despite receiving significant capital inflows from cash waqfs, VakıfBank did not adhere to Islamic methods in fund provision and instead functioned as a deposit bank. Vakıf Katılım was founded in 2015 (Turkish Trade Registry Gazette 2023). While Vakıf Katılım shares a common origin with the General Directorate of Foundations, its legal and institutional structures are distinct. Any similarities in their names can be attributed to their mutual founders. Vakıf Katılım operates independently based on the “Interest-Free Principle” and adheres to the Interest-Free Banking Principles and Standards. Vakıf Katılım provides financial solutions that align with Islamic principles, including Mudaraba, Mushareke, Qard, Murabaha, Ijarah, and others.