turkish-arab economic forum panel 6: potential for islamic banking and “sukuk” for financing...
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Turkish-Arab Economic ForumPanel 6: Potential for Islamic Banking and “Sukuk” for Financing
Major Projects in Turkey
Hasan GençHead of Enforcement Department
Banking Regulation And Supervision Agency-BDDK
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Islamic Banking implementation in Turkey
Hasan GENÇHead of Department
Banking Regulation and Supervision Agency
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Scope
Brief HistoryRegulatory FrameworkSome Key PointsFinancialsSukuk Regulation
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History
⌂ Decree of the Council of Ministers - (1983)
(Special Finance Houses)
⌂ The Banks Law –(1999)(Special Finance Houses)
⌂ The Banking Law – (2005)(Participation Banks)
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HistoryRegulatory FrameworkSome Key PointsFinancialsSukuk Regulation
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Regulatory Framework
⌂ Basically - Same rules
⌂ Specific provisionsDefining funding & financing methods
⌂ Some differences
Provisions Capital Adequacy
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Types of Funding
Participation fund
Special current account
Participation account
Pool of special funds
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Financing Methods
Corporate & Individual Financing Support (Murabaha)
Profit & Loss Sharing Investment (Musharakah )
Joint investments (Joint venture -Musharakah)
Financial leasing (Ijarah)Financing of Documents against Goods
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Regulatory Framework - Provisions
⌂ Special and general provision accounts set aside for loans extended from participation accounts are reflected in accounts of expenses and accounts of participation according to the rates of participation in losses.
⌂ Participation banks, may set aside a portion of up to %5 of the profit to be distributed to participation accounts as provisions for use to meet the provisions.
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Capital Adequacy Ratio
⌂ Loans extended from the participation accounts are taken into account 70% of their values in balance sheet in calculation of credit equivalents for calculating the credit risk
⌂ In calculation of Tier-II capital general reserves the sums of general provisions reflected by these banks in their expense accounts are taken into consideration.
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HistoryRegulatory FrameworkSome Key PointsFinancials Sukuk Regulation
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Some Key Points
⌂ Deposit Guarantee Scheme
Assurance Fund
Savings Deposit Insurance Fund
⌂ Shariah Board
No regulatory obligation
⌂ Islamic window
Not allowed
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HistoryRegulatory FrameworkSome Key PointsFinancialsSukuk Regulation
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Participatios Banks, as of December 2012
⌂ 4 Participation banks (3 foreign shareholder control)
⌂ 38,78 billion USD total assets
⌂ 26,48 billion USD loan
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Share in Banking Sector (%)
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The Growth of Total Assets and Loans
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Capital Adequacy Ratio (%)
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Loan to Deposit Ratio (%)
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Loan/Total Assets (%)
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HistoryRegulatory FrameworkSome Key PointsFinancialsSukuk Regulation
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Sukuk Regulation
⌂ Sukuk Regulation - Capital Market Board – 2010
⌂ A new Regulation Draft
More Detailed - 4 Kind of Sukuk Murabaha Sukuk Musharaka Sukuk Ijara Sukuk Wakala Sukuk One SPV
⌂ Subordinated debt
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Prospects…
⌂ More foreign investors
⌂ State Banks
⌂ Licensing
⌂ Sukuk issuance
⌂ Retirement Funds
⌂ Other…
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THANK YOU