There is no doubt that Turkey’s economic relations with the Islam world have substantially developed since Ak Parti which is considered to have conservative religious identity started ruling the country in 2002. In fact, several practices in the finance sector seen in the Arab countries have been put into practice in Turkey since then
Among these for instance Shariah-compliant finance is observed to have attracted considerable attention and to comply with this picture Turkey is planning to bring new rules to contribute to the functioning and growth of the market in a healthy way.
As soon as new rules to be introduced Turkish regulatory authorities regarding Islamic finance are approved by the Parliament "Islamic finance" referred to as "participation banking" is expected to enter a strong growth period.
The ruling party has voiced on many occasions that it targets to make Istanbul a global finance hub. The initiatives planned by the government certainly belong to this master plan which consists of main objectives such as “rebuilding parts of an already functioning infrastructure and shifting Istanbul’s financial services to focus on Islamic finance”. It is reported that the administration has already accomplished some work to introduce new rules about the interest-free Islamic Finance Model to be implemented upon the approval of the law by the parliament.
This way the government hopes to encourage many new companies to operate in the market which will hopefully make Istanbul the center of Islamic Finance Sector, in the world.
As for the performance of the companies already operating in the sector, the net profit is observed to be USD 223 million for the first half of 2017 with an increase of 3 percent as compared to the first half of 2016.
Experts in the sector comment that the government has taken right steps by providing incentives such as state-guaranteed loans for non-financial companies, tax reductions and convenient banking provisions and believe Turkish economy will substantially benefit from the development of Islamic Banking Sector in Turkey due to the high potential in this country.