PARTICIPATION BANKS AND DESIGNING THE FUTURE

An important player in the participation banking sector's development and applications in Turkey for over 30 years, Yunus Nacar shared his vast knowledge and experience for the participation banking's past, present, and future with Katılım Finans. "Participation banks reached a point where they can work on designing the future," says Nacar and shares his ideas on this role.

AS SOMEONE WHO HAS BEEN ACTIVELY INVOLVED IN THE ESTABLISHMENT AND DEVELOPMENT STAGES OF THE PARTICIPATION FINANCE SYSTEM IN TURKEY, COULD YOU TALK A LITTLE BIT ABOUT YOUR RETIREMENT DAYS?

To me, retirement is just a perspective. There is no such thing as, "I'm retired now and will never use my experi- ences and efforts". What this translates to in the Islamic world is that you have a sapling in your hand, you need to plant it even if the doomsday is coming. So, the concept of retirement is not a thing in our perspective. I do not have a payroll or receive a salary working for a company, but I still, thank God, continue my efforts for the good of society.

After retiring from my banking job, I started working in Kiler Holding for five years and concentrated on my time there. I also worked in Işıklar Holding for three years, which deals with manufacturing, seafaring, trade, and so on. I worked in the sector of participation banking for around 30 years. Afterwards, I started at Bezmialem Foundation University, where I am currently working, and I have been here for seven years. If I am not elected next year, I will have worked here for eight years in total.

IF WE LOOK AT THE POINT WHERE THE PARTICIPATION BANKING IS IN TURKEY AND THE WORLD, WHAT ARE YOUR PREDICTIONS AS SOMEONE WHO HAS CONTRIBUTED TO THE INDUSTRY FOR NEARLY 30 YEARS? WHERE SHOULD THE SECTOR TURN TOWARDS?

If we look exclusively at Turkey, I can say that participation banking has had its fair share of turning points. There were those that went bankrupt in 2000 and those who did not... That was definitely a turning point. And January 1, 2006 was another significant date for our sector. There was a very low profile of participation banking such as private financial institutions. Our letters of guarantee were not accepted abroad; we were not even recognised as official banks, etc. However, when we even did not know where we were at that time, the concept of participation banking had gained a solid place in world literature. And we should thank our President Mr. Recep Tayyip Erdoğan due to his support and contributions, leading us where we are at today. Another turning point for the sector was when the public entered the participation banking sector. That was quite a significant development.

Economics is the process of meeting unlimited needs with limited resources at the optimum level. To simply put, our desires are said to be vast and even infinite. What we should do first is to discipline our desires, that is the psychological aspect of it. We need to determine, solve, and justify our needs.

Human needs are not infinite; they have certain limits. And this means that we have enough resources to meet people's needs. Let us put it this way; meeting the people's needs with existing resources in the fairest way possible. That is what should be the concern of the economy.

Participation banking has a structure that is responsible for the distribution of resources. I suggest participation banks to design themselves in this regard. They must think of themselves as institutions responsible for the distribution of economic resources. We must analyse the sociology and 

psychology of a society well. That is why it is essential to have people from various fields such as psychologists, sociologists, religious scholars in our working groups.

Participation banking should consider the following: "Give benevolent loans," which is also frequently mentioned in the Quran. "If the other party cannot pay, give them time. If they cannot pay again in the extended time, forgive them." What do participation banks call for? What do they want? What is their message? Have we perceived it? How can we do it? How can we analyse it?

SO, YOU SAY THAT PARTICIPATION BANKS SHOULD CORRECTLY ANALYSE SOCIOLOGY, DEVELOP APPROPRIATE PRODUCT/SERVICE AND APPROACH MODELS, CREATE THE RIGHT GROUND, AND RESPOND TO ILLEGITIMATE PROCESSES.

We must know our customers well, and we must train them. Participation Banks Association of Turkey (TKBB) needs to seriously work on this aspect, and participation banks need to support these efforts, together establishing a structure where the rules are being followed. That is why I said earlier that participation banks could now work on designing the future. Participation banks should not be affected by what is happening in society, they should rather be the ones to affect the course of society.

How can we recover the lost process that is called be- nevolent loan? How can we institutionalise this? This question definitely needs an answer. Most importantly, are participation banking instruments in line with the current Islamic structure? This needs to be researched.

Are participation banks currently in a suitable working environment theoretically and practically? These need to be analysed by the joint efforts of TKBB and the Banking Regulation and Supervision Agency (BRSA).

Islamic scholars, who have been working on this issue also have very important duties and responsibilities. All 

the parties should analyse the past, present, and future of participation banking, identify what is wrong, correct the areas that need correction, and see how to establish areas that do not exist yet.

A revision committee should be established for the future of participation banking to prevent them from straying away from their future visions. If it no longer tries to achieve its missions, then we cannot really talk about participation banking, can we?

THERE ARE 17,000 PEOPLE WORKING IN THIS SECTOR. THE LITERATURE IS DEVELOPING EVERY DAY. WHAT COULD YOU SUGGEST TO YOUNG PEOPLE WHO WANT TO ESTABLISH THEIR CAREER IN THIS FIELD?

Our customers are different than the others, and we should share our knowledge with them. And they must raise our flag; they need to gain and let others gain. It is very im- portant to have competent bank employees and members. We need people who know, explain, direct, and influence customers. They must be someone who can take notes and go to their business and add something on them when the customer comes and says something.

What I have always seen in this sector is that we have the experience, and the newcomers have the knowledge. They are equipped with recent information. They know the digital side of the economy and the management charts better than us as they have learned about the latest version. So, if the idealistic friends at universities intend to work in participation banking, they should improve themselves in this direction.

Interview: Mustafa Özkan