Some Fiqh Considerations on the Project-Preferred Private Fund Pool

Abstract

Interest-free banking is a new phenomenon that developed in the mid-20th century. The interest-free banking model, which claims to operate based on the financial transaction principles of Islamic law, not only offers its customers a wide range of products but also continuously expands its current service portfolio with new products. Modern interest-free banking institutions, commonly known in our country as participation banks, collect the savings of individuals sensitive to interest through participation accounts designed based on the mudaraba contract. These funds gathered in participation accounts, are evaluated in various fields such as trade, manufacturing, health, industry, and service sectors according to the principles of participation banking, using financing methods like murabaha, musharaka, leasing, wakala investment, and mudaraba. Participation accounts operated based on mudaraba constitute the basis of the interest-free banking mechanism. However, there are certain differences between the mudaraba contract in today's participation banking practices and the contract found in classical jurisprudential literature. Indeed, the complex structure of financial markets and related requirements and obligations do not allow the use of classical contracts in their original form. Therefore, although the basic elements of the contracts applied by the interest-free ecosystem are based on classical jurisprudential principles, changes can be made in certain aspects of these contracts. In this context, certain jurisprudential criticisms and objections can be raised regarding the mudaraba contract that forms the legal basis of participation accounts. Criticizing such contracts from an Islamic law perspective contributes to expanding the transaction volume in the interest-free banking sector and developing new products. One of these products is the Special Fund Pool (SFP) Participation Account Contract offered by Emlak Kat & imath;l & imath;n Bankas & imath;. The main driver behind the emergence of this product has been the jurisprudential criticisms directed at existing participation accounts. Designed in line with the principles of the existing participation account, this product offers new opportunities for participating banks and their customers. The Special Fund Pool (SFP) Participation Account plays a significant role in making private fund pool services, usually reserved for qualified customers, also available for small savers. However, the large-scale preservation of the principles of the existing participation account in the Special Fund Pool (SFP) Participation Account somewhat diminishes its unique character. To avoid this criticism, the product in question has been presented not as an alternative to existing participation accounts but rather as a solution to an existing need. This study carries a unique value by examining both theoretical and practical aspects of the new product, distinguishing itself from many studies in the participation finance field that are generally limited to a theoretical framework. In this context, the study primarily aims to analyze the Special Fund Pool Participation Account Contract from a jurisprudential perspective. The relevant contract will be subjected to content analysis in the research, and criticisms and suggestions will be made based on the data obtained. The study consists of two sections. In the first part, the definition, scope, and operation of the Special Fund Pool (SFP) Participation Contract will be addressed to lay the groundwork for jurisprudential evaluations. Then, although there are clear differences between them, a comparison will be made between the existing participation accounts and the Special Fund Pool (SFP) Participation Account, which are similar in many ways. The features of the Special Fund Pool (SFP) Participation Account Contract that distinguish it from other accounts will be highlighted through the findings obtained from the comparison. In the second part of the study, the Special Fund Pool (SFP) Participation Account Contract will be examined, and jurisprudential evaluations will be made on whether the contract complies with the participation finance principles.