Participation Banking System

​Timeline of Participation Banking

• Money waqfs (trusts) were the first institutions where the principles of modern Participation Banking were implemented. The first money waqf was founded in 1456 by Sultan Mehmed the Conqueror, following the conquest of Constantinople (Istanbul), with a start-up fund of 24,000 golds. The waqf funds were used to pay the butchers for meat provision to janissary guilds.
• Money waqfs grew both in number and significance, maintaining their existence by 19th century. In time, however, they lost their relevance in the economic life, and disappeared.
• In 1972, with the effect of spike in oil revenues and high liquidity, Nasser Social Bank was founded in Cairo as the first modern interest-free bank.
• In 1975, the Islamic Development Bank was co-founded by 43 Muslim countries.
• In 1983, first Special Finance Houses began to operate in Turkey.
• Special Finance Houses were renamed to Participation Banks by a 2005 regulatory amendment. As of the amendment date, Participation Banks have continued with their operations under the Banking Regulation and Supervision Agency.