1923 - 1950 Turkish Banking Sector

2 JANUARY 2018
1923 - 1950 Turkish Banking Sector
Barış Eğilli
1923 - 1950 TURKISH BANKING SECTOR !1

2 JANUARY 2018
Content
1) Content……………………………………………………………………………. 2
2) List of Tables……………………………………………………………………… 3
3) Abstract…………………………………………………………………………… 4
4) Brief Explanation of Banking…………………………………………………….. 5
1) What is Banking?…………………………………………………………….. 5
2) Components of Banking Sector in Turkey…………………………………… 5
5) Turkish Banking Sector at Ottoman Period……………………………………… 6
1) Pre 1847 Period……………………………………………………………… 6
2) 1847 - 1875 Period…………………………………………………………… 8
3) 1875 - 1908 Period……………………………………………………………10
4) 1908 - 1923 Period……………………………………………………………12
6) Turkish Banking at Republic Period………………………………………………14
1) 1923 - 1932 Development of the National Banking Sector…………………. 14
2) 1933 - 1944 Statism and the Establishment  

Period of the Government Banking Sector…………………………………….17
3) 1945 - 1950 Development of Private Banking Sector………………………….23
7) Conclusion…………………………………………………………………………24
8) Bibliography………………………………………………………………………25

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List of Tables
Concentration and Major Players in Turkish Banking Sector…………………………….6
Foreign Banks in Ottoman Empire………………………………………………………..10
Capital Numbers of Banks………………………………………………………………..11
Deposit Numbers of Banks………………………………………………………………..11
Closed Banks Before 1930…………………………………………………………………12
Established Banks Between 1908 -

1923…………………………………………………………………………………………13
Closed Banks Between 1930-1945………………………………………………………….22

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Abstract
This research paper covers Turkish Banking Sector particularly from 1923 to 1950,
respect to Turkish Economic Situation, external and internal dynamics. To understand
Republic Period of Turkish Banking sector, pre-republic period must be understood in terms
of economic datas, and banking system of the ottoman empire era. Republic Banking Period
fed by Ottoman Empire Banking dynamics.
This article starts with a short explanation of the banking system and components of Turkish
banking sector. Then it goes by pre republic period and republic period and finishes with the
conclusion and sources.

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Brief Explanation of Banking

What is Banking?
A bank is a financial institution that accepts deposits from the public and creates
credit. Lending activities can be performed either directly or indirectly through capital
markets. Due to their importance in the financial stability of a country, banks are highly
regulated in most countries. Most nations have institutionalized a system known as fractional
reserve banking under which banks hold liquid assets equal to only a portion of their current
liabilities. In addition to other regulations intended to ensure liquidity, banks are generally
subject to minimum capital requirements based on an international set of capital standards,
known as the Basel Accords.
Banking in its modern sense evolved in the 14th century in the prosperous cities of
Renaissance Italy but in many ways was a continuation of ideas and concepts of credit and
lending that had their roots in the ancient world.
Components of Turkish Banking Sector

Turkish Banking sector is the second largest banking system in Emerging Europe
after Russia with an asset size of $862 Billion. Turkish banking sector is well-regulated,
monitored and governed by the two primary regulatory authorities; The Banking Regulation
an Supervision Agency and the Central
Bank.1
Concentration and Major Players in Turkish Banking Sector

Number of Banks Share in Assets Share in Loans Share in Deposits
Private
Commercial 28 %59 %57 %60
Banks
State Banks 3 %31 %32 %34
Development and
13 %5 %6 -
Investment Banks
Participation
5 %5 %5 %6
Banks
1 Garanti Bank

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Turkish Banking at the Ottoman Period
Pre 1847 Period
The first establishments of banks emerged at this period. Before the banking sector,
there are some primitive sectors worked as banks. These are moneychangers for exchange the
money and bankers for lending and borrowing the money. Generally the moneychanger
profession made by Jewish, Armenian and Levantine people. These people also some kind of
brokers that manage the money of others.
When the Ottoman state was experiencing budget deficits, the scheme went to tax
farming (iltizam) or borrowed from taxman in order to cover the deficit. The government did
not look at foreign borrowing. However, from the 19th century, the insufficiency of these
internal resources brought borrowing from foreign sources. The first borrowings were made
in Galatia, the Galatia, and the Venetian and the Genoese who lived in Europe (also called
Levantine).2
However, the expansion of the state budget deficit and the start of commercial
relations with foreign countries will make Galata Bankers inefficient, and therefore the
establishment of the first banks will be started. Initially, the attempt to set up a bank was
initiated by the United Kingdom in 1836. The British initiative followed the initiatives of the
French and Swedes. But they could not be established because they could not get permission
from the government.
In 1842 there was two company founded for allocating the empire revenues and
transfer to revenues to relevant places. These were “Anadolu Kumpanyası” and “Rumeli
Kumpanyası”. These companies were the first banking establishments of the Ottoman Empire
2 Vedat Eldem, Osmanlı İmparatorluğu’nun İktisadi Şartları Hakkında Bir Tetkik, Ankara 1994

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The absence of a coordinated monetary policy in the Ottoman state, the absence of
banking and other similar institutions, caused the economy to face significant difficulties.
Monetary reforms were carried out in 1844 to keep the value of the golden lira constant, to
keep the exchange rate constant, to prevent the devaluation of Kaime (paper money), in short,
to bring the economy to a stable position. In order to implement these policies, a modern
banking institution started to be established in 1856 and later.

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1847 - 1875 Period
The first bank in the Ottoman state was founded by the government under the
influence of Jacques Alléon, Manolaki Baltazzi, in the name of Bank-ı Dersaadet-Banque de
aConstantinople.3 Thus, for the first time in the Ottoman Empire, a bank was established that
assumed the function of arranging foreign payments. Banque de aConstantinople succeeded
stabilize the exchange rates until the the economic effects of French Revolution perceived
from Ottoman economy. The economic effects of French Revolution affected the exchange
rates and the economy went to a uncontrollable way. Banque de aConstantinople was closed
in 1852 for not paying short-term debts owing to policies accepted for foreign countries and
sterlin increased in value to Ottoman Empire money and raised to 150 kuruş from 100 kuruş.4
Another of the attempts to establish a bank in the Ottoman state came after financial
troubles during the Crimean War of 1853-1856. The Ottoman state had to make its first
foreign debts during this war. The Ottoman state had to borrow £ 5 million on August 4,
1854, £ 3,300 thousand on August 24, 1854, and £ 5,500 thousand on June 27, 1855. This
brought about the establishment of a state bank with broad privileges to carry out credit and
borrowing businesses and initiatives.
After about a year of work, the Ottoman Bank (Ottoman Bank) was founded in 1856,
headed by British diplomat Layard, to be headquartered in central London with a capital of £
500,000 each, consisting of 25 thousand shares worth 20 pounds sterling. 5The Ottoman Bank
opened its doors in Istanbul on June 13, 1856, ten days after the opening of its central office
in London.However, the Ottoman Bank (The Ottoman Bank) did not achieve the expected
success. From the 1860s efforts to establish a new state bank began. The partners of the
Ottoman Bank, Galata bankers and many foreign investors brought a number of national
3 Özçam M. (n.d). 1923 Ve 1980 Arasında Türk Bankacılığının Gelişimleri

4 Yaşar, M. (n.d.). Cumhuriyet Dönemi Türkiye Ekonomisi. Akbank Kültür Yayınları.

2 JANUARY 2018
bank projects to the Ottoman government. The government hoped that the bank to be
established would be in control of its own founders who would like to set up a common bank
for a joint administration between itself and the shareholders
Following these developments, the shareholders of the Ottoman Bank and the group
of French shareholders made an agreement in Paris in 1862. Thus, an important step was
taken to establish a national bank, which is the privilege of the state bank, which has been
trying to be realized since 1856. The Ottoman Bank, which has been operating for 7 years,
was liquidated in 1863 and became a new bank as Bank-ı Şahane-i Osmani with the
participation of the Ottoman government. The Bank was officially established with the
approval of the Company Agreement by Sultan Abdulaziz without delay. Thus, this new bank
under British and French partnership, subject to Ottoman law, administration and supervision
of the bureaux in London and Paris, has been operating as a state bank for 30 years with the
privilege of issuing banknotes and monopolies. An important turning point in the activities of
the bank was the granting of the authority to monitor the budgets of the state with respect to
the financial status of the state, the budget, the state's income and expenses in 1875.
Bank-i Şahane-i Osmani functioned as a trading bank which participated in the

financing of a large number of investments with infrastructure in the Ottoman state, operating
as a treasury lending to a state bank and the state for a long time. The Ottoman government,
which became a fully-owned state bank, had a reliable intermediary institution that would
make the income-expenditure balance, loan transactions, external debts and payments.

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1875 - 1908 Period

In this period, the economic situation of Ottoman Empire was not stable until the
Duyun-u Umumiye founded in 1882. After the establishment of Duyun-u Umumiye, the
demand of foreign investors increased because of the believe of future economic stability.
There was several foreign banks established in this period. These are; Deutsche-Palastina
Bank, British Oriental Bank, Anglo-Palastine Company, The Bank of Greek Atina, Şark
Bankası, Viener Bankverein, Deutsche Orientbank and Societe Commerciale d’Ôriente.
There were only several number of national banks established and worked in this period.The
most important ones were Ziraat Bankası, Osmanlı Bankası and Selanik Bankası. Ziraat
Bankası. Ziraat Bankası was commonly funded the agricultural investments rather than the
other foreign banks.
Foreign Banks in Ottoman Empire

Bank Investment Group
Deutsche Bank Germany
Deutsche Orient Bank Germany
Deutsche Palastina Bank Germany
Wiener Bank Verein Austria
Union Bank Austria
Credit Lyonnais France
Anglo-Levantine Banking Co. England
British Oriental Banking Co. England
Keyser and Co. England
Smyrna Bank England
La Societa Commerciale d’Orinete Italy
Banco di Roma Italy
Hungarian Société Anonyme Hungary
Bank of Mtylene Ottoman Empire
Bank of Salonica Ottoman Empire/Foreign
Banque Russe pour le Commerce Etr. Russia
Orient Bank Greece/Germany
Bank of Athens Greece

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There were two main purpose of the establishment of the foreign banks. The first one
was control the revenue of Ottoman Empire and gain benefit from the Duyun-u Umumiye.
The second one was the control the investment system of Ottoman Empire.
Capital Numbers of Banks

İtibari Ödenmiş
1888 1900 1888 1900
Ziraat Bankası 1000 1000 221 675
Osmanlı Bankası 1100 1100 550 550
Selanik Bankası 9 18 9 18
Other National 66 - 66 -
Banks
Deposit Numbers of Banks

Deposit Credit
1888 1900 1888 1900
Ziraat Bank and 5 10 22 301

Retirement Fund
Ottoman Bank 527 981 608 909
Selanik Bankası 2- 12- 5 35
Foreign Banks 10 55 - -
It is seen that the transaction volume is mostly in Ottoman Bank both in terms of
capital and deposits. Ziraat Bank is also in second place in terms of capital value. The
transaction volumes of the other banks are quite small compared to Ziraat Bank and Ottoman
Bank.

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1908 - 1923 Period
With the effect of the Second Constitution, especially after 1908, the national banking
movement became very important and the developments accelerated. Especially the effect of
the 1st World War was also important and accelerated the development of national banking.
The total number of banks established with national capital between 1911-1923 has been 21.
The majority of established banks were only one or two branch banks operating in line with
regional needs.
In particular, Konya has drawn attention to the fact that three local banks are national.
In this context, local capital-based banking activities have increased in Anatolia. In a sense,
national banking has facilitated the birth and development of local banking. Only eighteen of
the national banks established in the Ottoman period had access to the period of 1923 and the
new Turkish state.
Closed Banks Before 1930

Name Open Closed
Aydın İncir ve Himaye-i Zürra 1912 1913

Osmanlı A.Ş
Ticaret ve İtibari Umum Bankası 1917 1918-1929
İtibar-i Milli Bankası 1911 1927
Köy İktisat Bankası 1916 1928
Asya Bankası 1914 1928
Eskişehir Çiftçi Bankası Osmanlı 1916 1929

A.Ş
Milli İktisat Bankası 1918 1929
İtibar ve Ticaret Osmanlı A.Ş 1918 1930
Van Milli İktisat Bankası 1929 Unopened

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Established Banks Between 1908 - 1923

Name Year Location
Istanbul Bankası 1911 Istanbul
Aydı İncir ve Himaye-i Zürra 1912 Aydın

Osmanlı A.Ş
Konya İktisadi Milli A.Ş 1912 Konya
Karaman Milli Bankası Osmanlı 1913 Karaman

A.Ş
Asya Bankası 1914 Istanbul
Emlak ve İkrazat Bankası Osmanlı 1913 Karaman

A.Ş
Milli Aydın Bankası 1914 Aydın
Akşehir Osmanlı İktisat A.Ş 1916 Akşehir
Eskişehir Çiftçi Bankası Osmanlı 1916 Eskişehir

A.Ş
İtibarı-i Milli Bankası 1916 Istanbul
Köy İktisat Bankası 1916 Kayseri
Konya Ahali Bankası T.A.Ş 1917 Konya
Manisa Bağcılar Bankası 1917 Manisa
Ticaret ve İtibari Umum Bankası 1917 Istanbul
İtibar ve Ticaret Osmanlı A.Ş 1918 Istanbul
Milli İktisat Bankası 1918 Istanbul
Adapazarı Emniyet Bankası 1919 Adapazarı
İktisat Türk A.Ş 1920 Istanbul
Konya Türk Ticaret Bankası 1920 Konya
Bor Zürra ve Tüccar Bankası 1922 Bor
Istanbul Küçük İkrazat Sandığı 1923 Istanbul

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Turkish Banking at Republic Period

1923 - 1932 Development of the National Banking
After the Liberty War, Turkey faced with a big population change problem. Turkey
lost 1 million 300 thousand Greek people because of the exchange (mübadele). These
expatriated people was living in the cities, means that the city population was decreased.
Decreased city population caused the decrease in the skilled workforce. This problem had to
be solved by developing the national bourgeoisie and national banking sector. So the period
of 1923 - 1932 was the development of the national banking sector and development of the
national bourgeoisie. Before talking about the national banking sector at this period, it is
better to understand the external and internal dynamics of 1923.
In 1923, 60% of the 4 million Turkish liras saving deposits were held in the national
banks, others were held in the foreign banks.It is foreseen that the shares of foreign banks
make up almost 50% of total deposits.There were 35 banks actively working at the start of
the republic regime. 22 were the national banks and 13 were the foreign banks. There were
439 branches totally in the 1924. 6
Izmir Economic Congress was one of the most important progress for the national
banking sector of Turkey. There was two main side of the congress; the group of the
commerce and the group of industry. Commerce side demanded to establish a main
commerce bank that regulates the commerce sector, the industry side demanded to fund the
current national and foreign bank for increase the circulating capital. After the congress, we
see that there were important banks established for financing the Turkish commerce and
industry sector. These are; Türkiye İş Bankası, Türkiye Sınai ve Maadin Bankası, Türkiye
6 Atatürk Araştırma Merkezi. (n.d.). Retrieved January 02, 2018, from http://www.atam.gov.tr/

2 JANUARY 2018
Sanayi Kredi Bankası, Emlak ve Eytam Bankası ( Turkiye Emlak Kredi Bankası), and the
most important one T. C. Merkez Bankası (Central Bank) 7
On August 26, 1924, İş Bank was established with a capital of one million TL. The
bank was founded by Mustafa Kemal with special efforts and support and he gave his name.
One quarter of the paid capital, 250 thousand liras, was met by Indian Muslims sent to the
War of Independence, with the remaining amount being "co-friendly, with a bit of
memorandum of coercion”. Atatürk explained the aim of İş Bank as "to create a fully
contemporary and national bank based on the value and trust of the people, which is at the
beginning of measures to save and increase the motherland".
Another bank that has been operating in this period is the TC, which was established
in 1930. The Central Bank. The Bank was established in the status of joint stock company
and started to work in 1931. (Keyder, 1991, 41)
With the law numbered 633 dated April 19, 1925, the bank started to work on May 1,
1925. Industry and the Maadin Bank were the first institutions to allow the state to develop
industrial and mining production and to work directly on it. With the establishment of this
bank, which is one of the first of its kind in the development bank, the state has formed a kind
of bank which is dominant in Turkish banking. The Bank of Industry and Maadin had
important duties such as giving credits to new industrial enterprises and playing a regulatory
role against these enterprises. At the beginning of the year, the capital is 6,147,137.-TL. The
capital consists of cash of 2.000.000 TL and the remaining part is immovable property.8
The government established Emlak and Eytam Bank with the capital of 20.000.000.-
TL with the Law No. 844 dated May 22, 1926 to provide loans to the construction sector. The
purpose of the establishment of the bank and the orphans whose money was administered and
kept in the old custody of the bank were transferred to this bank, the bank provided long-term
loans to give interest on behalf of orphans and to mortgage all buildings and land within the
7 Atatürk Araştırma Merkezi. (n.d.). Retrieved January 02, 2018, from http://www.atam.gov.tr/

2 JANUARY 2018
municipal boundaries in favor of the bank. The bank's founding capital is 20,000,000 liras.
The Republican administration has liquidated the poorly managed orphan's chests and has
invested 6,000,000 pounds in long term deposits. Thus, the bank provided a long-term
funding needed.
The establishment of the Real Estate and the Eytam Bank in this period, benefited
from this bank on the prosperity of the country. The distinguishing feature of the bank from
other banks in this period is that it is the public bank that lends money against real estate
mortgages. The country that was burned and destroyed by the war and the country that did
the war had important services with the long term loans given to the residence construction as
well as the construction.
Early years of the republic regime, there was an increase at the number of the foreign
banks because of the large share of foreign trade and low impact of the national banking
sector. There were 6 foreign banks established during the age of liberalization of Turkey
(1920’s). These were Banque Chrisoveloni-Hrisoveloni, Banque Belge Pour L'etranger,
Banque Generale Pour Le Commerce Etranger, Banque Russe Pour Le Commerce Exterieur,
İtalyan Şark Bankası, Banque Franco Asiatique. 9
After 1929 there was not established a new foreign bank for 50 years. And we see that
there was a slight decrease in the number of foreign banks from 1929 to 1977.

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1933 - 1944 Statism and the Establishment Period of the

Government Banking Sector
At 1930’s, the main source of economy was the agricultural events. We can say that
Turkey had a agricultural-dominant economy in 1930’s. Because of the insufficient capital
and demand for industrialization, liberalization policy failed at 1920’s and the economic
policy shifted to statism during the 1930’s.
It is better to distinguish between the statism and Turkish-economic-statism. The

lexical meaning of statism is “a political system in which the state has substantial centralized
control over social and economic affairs.”. To be clear, statism is not just a economic policy,
it is a political system. USSR can be a example of statism political system. Turkish-
economic-statism is a strategy of industrialization which is named policy of economic state
control, it is argued that state had more plentiful resources than market enterprises in the
capital intensive and high technical knowledge requiring investments due to the
circumstances that was present in Turkey.
Shifting to statism economic policy was not just a result of the internal dynamics.
There was some important external dynamics that supported the statism economic policy in
Turkey. Maybe the most important one was the Great Depression. US centered economic
crisis, as known as Great Depression, affected the investment capital and trade deficit in
Turkey. Also the step fall on the agricultural products and decreased demand of private sector
investment on industrialization made statism is an obligation for Turkey. The result of the
internal and external dynamics of early 1930’s, statism was a obligation for the economy of
Turkey. The government-made and government-supported establishments was determined at
the 1st and 2nd economy congress. There were planned to build 20 plants at the 1st economic
congress.

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Economical statism policy was also affected the banking sector. There was several
government-supported banks founded during this period. These were; Sümerbank (1933),
Belediyeler Bankası (1933), Etibank (1935), Denizbank (1937), Halk Bankası and Halk
Sandıkları (1938).
The fact that the industrial sector can be achieved more efficiently and regularly was
established by the foundation law no. 2262 on 3 June 1933 so that the industrial branches
required to be established primarily in the state industrial program can only be realized by a
state organization. Sümerbank's capital of 20.000.000 pounds was paid by the state. 10
Mustafa Kemal Atatürk ordered by 20 June 1935, 2905 numbered law was established
by the name of the Anatolian civilizations of the name of the Etiler has been taken. It was
founded with the aim of creating an economic infrastructure in development such as the
production of underground resources, the marketing of these underground resources, the
construction of plants, and the production of electrical energy. Etibank has had important
services in the country's economy. The credit transactions have been limited to participating
and self-created businesses. The nominal capital of Etibank is 20 million TL and the paid-up
capital in 1935 was only 37,500.-TL. At the end of 1938, the capital increased to TL 4.5
million.
The Municipal Bank was established on 24.06.1933 with the aim of

reestablishing and building the city and the towns by the law numbered 2301. The purpose of
its establishment is to develop cities and towns, to prepare development plans, water,
electricity, gas, sewerage etc. to provide facilities related to public services, to provide
technical assistance to the structures and municipalities with necessary medium and long
term loans.
10Aydoğan,M. (n.d.). Cumhuriyet Dönemi Para Politikası ve Bankacılık (1923-1938) / Metin AYDOĞAN :
Metin AYDOĞAN - GuncelMeydan. Retrieved January 02, 2018, from http://www.guncelmeydan.com/pano/
cumhuriyet-donemi-para-politikasi-ve-bankacilik-1923-1938-metin-aydogan-t43378.html

2 JANUARY 2018
Denizbank was established by law number 3295 on November 30, 1937 with the aim
of managing the seaside businesses, setting up new ones and financing them. But its activity
started in 1938. The bank with a nominal capital of 50 million TL has not been long-lived. In
1940 the activity was finalized.
Halk Bankası and Halk Sandıkları founded for support the small business and
entrepreneurs.
Since the 1933-1944 period was necessary for industrialization but the income was
relatively low, it was possible for the state to realize investments not made by the private
sector by financing these investments by imposing budgetary opportunities and by resorting
to some compulsory saving opportunities.With the Banking Law No. 2999 adopted in 1936, it
was imperative to reserve foreclosure provisions at 15 percent of bank deposits or other
interest- bearing securities at or near the same rate (approximately 6-7 percent) and to
provide low- cost financing for public investments (Zarakolu (1973), pp. 53.)
In this period, due to both the financing needs of state enterprises and the increase in
defense spending due to World War II, the government's loan demand from the banking
sector and long-term domestic borrowing increased and government used to rediscount of
Central Bank.
The decline in revenues in the agricultural sector as a result of the World Economic
Crisis and the decline of commercial activity led to the closure of a large number of single-
branch domestic banks in the early 1930s. In the 1930s, Ziraat Bank fulfilled important
functions in supporting wheat prices and granting loans to small producers. In 1937, the
Bank's capital was increased again and turned into an economic state enterprise. Despite this
capital increase "The Government, which had a serious difficulty in meeting the military
expenditures during World War II, caused Ziraat Bank to lend to a large extent, causing a
significant contraction in agricultural credits between 1940 and 1944. "(Tezel (1986), p.351)

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We can say that there was a organic bond between the establishment of the state
banks, industrial plans and economic statism. The nature of established banks is that they
must be active to support a particular sector or community.
Established banks at this periods were; Sümer-bank, Etibank, Denizbank, Belediyeler

Bankası (İller Bankası), Türkiye Halk Bankası, TC. Ziraat Bankası, and Türk Ticaret Bankası.
The fact that some of the national banks operating in our country stopped their
activity or entered into liquidation and the large number of foreign banks ending activities in
our country led to a decrease in the number of banks and branch offices in the period of
1932-1945. While the number of banks working in 1932 was 60 and the number of bank
branches was 483, in 1945 the number of banks decreased to 40 and the number of bank
branches decreased to 411.
In this period, as the banking activities started to become more and more shaped,
some laws were issued resulting in an increase in the need for legal regulations.
Deposits Protection Law: The Deposits Protection Law dated 30.5.1933 and numbered 2243
is a law that regulates the state intervention of banks in Turkey in a comprehensive manner
for the first time.
Deposits Protection Law is a short law with 25 articles. This law had provisions that
gave them some obligations and duties, limiting the banks in various ways. As a matter of
fact, according to the Deposit Protection Law, banks could only be established as anonymous,
stock limited commodity or limited liability company. There was a requirement to obtain
permission from the Ministry of Finance for accepting deposits. In order to start accepting
deposits, it is imperative that the cities and towns where each bank's headquarters is located
have at least the amount of capital and the need for the amount shown in the jurisdiction
according to the influence of the towns and towns. This law was enacted in 1936, when the
Banking Law No. 2999 entered into force.

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Lending Law on Money Borrowing: Law No. 2279 enacted on 8.6.1933 enacted loan lending
transactions and limited deposit interest on one side and credit interests on the other side,
according to their types. Then some of the items of this law were changed and some items
were added to the law.
2999 Sayth Banks Act: Experience from the implementation of the Deposit Protection Law
and the laws of the foreign countries published by the Banks Act No. 2999, were adopted and
accepted at 1.6.1936. The development of our national banking system has necessitated such
an arrangement. This law, which is made up of 69 items, has remained in force for more than
22 years without being changed if the items related to legal provisions are excluded.
The law establishes the establishment of banks and sets up the requirement for banks
to be established as an incorporated, limited or sympathetic limited partnership. The Banking
Law No. 2999 has been in effect since the adoption of the Banking Law No. 7129 in 1958.

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Closed Banks Between 1930-1945

Name Open Closed
Türkiye Sanayi ve Maadin Bankası 1925 1932
Türk Ticaret ve Sanayi Bankası 1925 1932
Üsküdar Bankası 1929 1933
İktisat Anonim Şirketi 1918 1933
Türkiye Sanayi Kredi Bankası 1932 1933
İstanbul Bankası 1911 1934
Karaman Çiftçi Bankası 1925 1934
İstanbul Esnaf Bankası 1925 1934
Aksaray Halk İktisat Bankası 1926 1936
Kayseri Milli İktisat Bankası 1933 1937
Trabzon Bankası 1928 1937
Karadeniz Bankası 1928 1937
Karaman Milli Bankası 1913 1937
Kastamonu Bankası 1930 1938
Diyarbakır Bankası 1931 1939
Kırşehir Ticaret Bankası 1931 1939
Niğde Çiftçi ve Tüccar Bankası 1926 1940
Mersin Ticaret Bankası 1929 1940
Ermenek Ahali Bankası 1927 1940
Denizbank 1938 1940
Envali Gayrimenkule ve İkrazat 1914 1942

Bankası
Konya Türk Ticaret Bankası 1920 1943
Konya Ahali Bankası 1917 1945

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1945 - 1950 Development of the Private Banking Sector

In this period, especially after 1950, the change in economic policy and the revival
seen in the economic life with the end of World War II also showed its effects on the banking
sector. When Yapı Kredi Bank, which was established in 1944, was included in this period,
30 new banks were established, including three special laws and interbank settlements.
Despite the establishment of 30 banks in the period 1945-1960, most of them were not
longevity, and some of them were liquidated in the following years. This period ended the
activities of 14 banks, 4 of which were foreign banks and 4 of which were established in the
same period. From the banks established during this period; Denizcilik Bank, Türkiye
Vakıflar Bankası, Türkiye Öğretmenler Bankası are public banks.
Apart from these, despite the establishment of 30 banks in the form of private banks,
most of these banks have not been longevity and have been liquidated in a short time. In this
period, the number of banks that continue to operate today is 11. The banks that are
established in the mentioned period and continue their activities today are as follows;
Derbank, Demirbank, Yapi ve Kredi Bank, Türkiye Garanti Bank, Akbank T.A.Ş.,
Pamukbank, Şekerbank, Industrial Development Bank of Turkey. 11
The national banks that ended their activities between 1945 and 1960 are: Konya
Bank, Nevşehir Bank, Ürgüp Zürra and Merchant Bank, Bor Esnaf Bank, Göynük Industry
and Credit Bank, Turkish Bank, Konya Bank, Akseki Ticaret Bank , The Bank of the Old
Muhalipler of Turkey (MUHABANK), the Turkish Deputies, Officers and Officers Bank
(TÜMSUBANK). 12
The foreign banks whose activities ended in this period are; Deutsche Orient Bank,
De-utsch Bank, SSCB Trade, Hariciye Bank, Şarki Karip Ticaret Bankası.


2 JANUARY 2018
Conclusion
This article overviewed the conditions, internal and external dynamics of Turkish
Banking System between the years of 1923 and 1950 with a microeconomics and
macroeconomic perspective.
The fact that the banking sector of Turkey is not well established until the
development of the private banking sector. Because of that, we don’t see many important
events. The economic policy of government mostly focused on the development of the
overall economy in this foundation period. We can say that, the most important economic
events in the banking sector started after the 1950’s which is the period of emerging the
private banking sectors. Before 1950, banking sector in Turkey dominated by mostly state
banks and these state banks mostly focused on the development of the survival areas of
economy with the perspective of statism.

2 JANUARY 2018
Bibliography
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rekabet analizi. İstanbul: Türkiye Bankalar Birliği. Retrieved December 23 from https://
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1923 - 1950 Turkish Banking Sector

1923 - 1950 TURKISH BANKING SECTOR !1

4) Brief Explanation of Banking…………………………………………………….. 5

2) Components of Banking Sector in Turkey…………………………………… 5

5) Turkish Banking Sector at Ottoman Period……………………………………… 6

1) Pre 1847 Period……………………………………………………………… 6

2) 1847 - 1875 Period…………………………………………………………… 8

3) 1875 - 1908 Period……………………………………………………………10

4) 1908 - 1923 Period……………………………………………………………12

6) Turkish Banking at Republic Period………………………………………………14

1) 1923 - 1932 Development of the National Banking Sector…………………. 14

2) 1933 - 1944 Statism and the Establishment

3) 1945 - 1950 Development of Private Banking Sector………………………….23

1923 - 1950 TURKISH BANKING SECTOR !2

Concentration and Major Players in Turkish Banking Sector…………………………….6

Foreign Banks in Ottoman Empire………………………………………………………..10

Capital Numbers of Banks………………………………………………………………..11

Deposit Numbers of Banks………………………………………………………………..11

Closed Banks Before 1930…………………………………………………………………12

Established Banks Between 1908 -

Closed Banks Between 1930-1945………………………………………………………….22

1923 - 1950 TURKISH BANKING SECTOR !3

1923 - 1950 TURKISH BANKING SECTOR !4

Brief Explanation of Banking

Components of Turkish Banking Sector

Concentration and Major Players in Turkish Banking Sector

State Banks 3 %31 %32 %34

1923 - 1950 TURKISH BANKING SECTOR !5

Turkish Banking at the Ottoman Period

Pre 1847 Period

1923 - 1950 TURKISH BANKING SECTOR !6

1923 - 1950 TURKISH BANKING SECTOR !7

1847 - 1875 Period

3 Özçam M. (n.d). 1923 Ve 1980 Arasında Türk Bankacılığının Gelişimleri

1923 - 1950 TURKISH BANKING SECTOR !8

Bank-i Şahane-i Osmani functioned as a trading bank which participated in the

1923 - 1950 TURKISH BANKING SECTOR !9

1875 - 1908 Period

Foreign Banks in Ottoman Empire

Deutsche Bank Germany

Deutsche Orient Bank Germany

Deutsche Palastina Bank Germany

Wiener Bank Verein Austria

Union Bank Austria

Credit Lyonnais France

Anglo-Levantine Banking Co. England

British Oriental Banking Co. England

Keyser and Co. England

Smyrna Bank England

La Societa Commerciale d’Orinete Italy

Banco di Roma Italy

Hungarian Société Anonyme Hungary

Bank of Mtylene Ottoman Empire

Bank of Salonica Ottoman Empire/Foreign

Banque Russe pour le Commerce Etr. Russia

Orient Bank Greece/Germany

Bank of Athens Greece

1923 - 1950 TURKISH BANKING SECTOR !10

Capital Numbers of Banks

1888 1900 1888 1900

Ziraat Bankası 1000 1000 221 675

Osmanlı Bankası 1100 1100 550 550

2) 1933 - 1944 Statism and the Establishment  