EconWorld2017@Rome Proceedings, Rome, Italy, 25 - 27 January 2017, pp.1-15
The popularity of Islamic banking is increasing day by day. On the other hand, some people
also criticized this system in some aspects. One of the criticism is that profit sharing rates of
Islamic banks are similar to interest rate of deposit banks. While considering this issue, this
study aims to identify the causality relationship between profit sharing rate and interest rate in
Turkey. Within this scope, monthly, quarterly, 6-months and yearly data for the period between
2000 and 2016 was analyzed separately. In addition to this situation, Toda Yamamoto causality
analysis was used in this study so as to achieve this objective. According to the results of the
analysis, it was determined that there is a significant causality relationship between these rates.
In other words, it was concluded that interest rate of the deposit banks is the main indicator of
the profit share rate of Islamic banks in Turkey. The main reason behind this situation is that
indicators in the market affect both deposit banks and Islamic banks. Therefore, it is inevitable
that deposit rates and profit share rates will be similar when deposit banks and Islamic banks
perform in the same market.