Participation in the banking sector and comparison with traditional banking

The history of banking was first seen in the Sumerians in 3500 BC in the history of the world. Before the concept of money emerged in the history of humanity, the exchange of products and services was seen. With the discovery of money, churches in Europe have made similar applications to banking activities with the trust method. The modern development of banking history took place in Europe. While Europe was developing itself in terms of industrial revolution and financial technologies, the Ottoman Empire was left behind due to the economic depression and political relations. Therefore, with the increase in inflation in the last period of the Ottoman Empire, financial resources were needed. The banks established in the Ottoman lands were of foreign origin and served to individuals. However, due to the changing political structure and economy of the country, foreign banks were closed and traditional banking systems were created with domestic capital. The traditional banking system maintains an interest-based operation. In this case, people who belong to the religion of Islam could not benefit from traditional banking practices. With the oil crises affecting the world, the oil resources in the Arabian Peninsula, and the participation of Muslims in the economy, a new banking system was needed. In this way, the foundation of participation banks was laid. Participation banks, unlike traditional banking, do not benefit from the interest system. In this study, participation and traditional banks will be examined in line with the literature, and performance comparison will be made in line with the information obtained from TKBB, TBB and BDDK.