DECISION NO: 3 CBRT Rediscount Credits


DECISION DATE : 02.11.2018
DECISION SUBJECT : CBRT Rediscount Credits


REQUEST DATE : 31.07.2018
REQUESTOR : TKBB- Foreign Trade - Foreign Exchange and Product Development Committees


Central Bank of the Republic of Turkey (CBRT) Rediscount Credits (Pre-Shipment/Post-Shipment Export and Foreign Exchange Earning Services): CBRT rediscount credit is for the use of exporter companies, and a certificate of guarantee in return is requested for a surety. With this financing method, EUR is used with zero profit rate, and USD is used with a 6-month LIBOR. It is necessary to amend the "Rediscount Credits for Export and Foreign Exchange Earning Services" regulation in accordance with the interest-free principles to provide the opportunity provided to the customers of the deposit banks for the use of "Rediscount Credits" provided by the CBRT to exporters through banks. When the ease of using CBRT Rediscount Credits is provided to participation banks and participation bank customers, participation banks will take part in the market with more fair and equal competition conditions, and customers who do not make transactions with interest will benefit from this opportunity of which they are deprived.

In order to encourage exports, CBRT provides low-rate rediscount credits to producers who export goods abroad. By making an agreement with the CBRT, the institution wishes to use the credits as the representative of the CBRT and make it available to its customers through murabaha. Transaction processes shall be as follows:

  1. The customer applies to the participation bank with an application to use a rediscount credit.

  2. Participation bank submits the application to CBRT.

  3. Following the approval of the CBRT, collateral bill is received from the customer, and the collateral bill is kept in the participation bank following participation bank's surety. (Collateral amount: capital + dividend amount)

  4. The customer gives the participation bank as security. (This situation is also stated in the protocol made with the CBRT)

  5. The fund received from CBRT is paid by the participation bank to the seller from which the customer purchases goods for USD through murabaha method.

  6. When the customer pays the debt in due time, it is forwarded to CBRT. In the case that the customer does not pay their debt, the participation bank pays the debt on time as the surety.


  1. Is the product described above in accordance with the principles and standards of participation banking?

  2. In addition to the above process that is valid for USD lending, the participation bank transfers the entire amount received from CBRT to the account of customers as CBRT does not demand a profit in EUR lending. Is this transaction in accordance with participation banking principles and standards?

  3. A commission fee is collected in return for the operational costs incurred by the participation bank in financing for USD, EUR, or other foreign currencies. Is this transaction in accordance with participation banking principles and standards?

  4. The money received from CBRT occasionally stays in the corporate accounts for a few days, and the participation bank uses these funds. Is this transaction in accordance with participation banking principles and standards?

  5. In the relevant structure, there may be a difference between the day CBRT pays the money to the participation bank and the day the customer submits the application documents. CBRT calculates profitability from the day the money is paid to the participation bank. How should the participation bank calculate the fee that will receive from the transactions; should it take into account the day the money is received or the day the application documents are received?


  1. When the method described in the request is analysed in Islamic terms, it is possible to model it as follows: According to this, “A hazelnut exporter receives an amount of USD 600 = 100 kg hazelnut order with 180 days (six months) maturity from abroad. This exporter makes a preliminary meeting (or receives a promise/va’d from the producer) to purchase 100 kg of hazelnuts from the producer in return for USD 500. Then, they submit the proforma showing the said preliminary interview to the participation bank. The aim is to reach financing of USD 500. Thereupon, the participation bank makes an application to CBRT, which is the main source of the financing to be provided, for the Rediscount Credit on behalf of the customer. CBRT receives bonds from this exporter customer through the participation bank for a profit of USD 15, that is, USD 515, for the principal financing of USD 500 it will provide for it. In this bond, the debtor is the customer who wants to buy the hazelnuts from the domestic market, while CBRT is the creditor. However, this deed, as a rule, has not caused a debt on behalf of the customer since no contract has been made regarding the purchase of hazelnuts. The debt will arise from the murabaha contract to be made in the next step. In the proposed model, instead of an interest-bearing loan, CBRT buys hazelnuts from the producer through a participation bank and sells to the exporter customer; the murabaha model is applied.” This rediscount model, which we can be briefly described as above, is in compliance with the principles and standards of participation banking, provided that the terms of the proxy and murabaha contracts are observed.

Sharia Basis:

The rediscount for the product in question has turned into a murabaha. Here, the participation bank acts as the agent of CBRT in the purchase and sale of murabaha and at the same time acts as the agent of the customer until the murabaha contract. In addition, the participation bank is a guarantor for the customer, in the form of one person being a guarantor for the debt of another person arising from the sales contract.

  1. When CBRT does not demand a profit as a result of the EURIBOR rates in the use of EUR, the transaction is a kind of at-cost sale (tevliye) contract between CBRT and the exporter, and the transaction is permissible in terms of Islamic rules, provided that it also carries the other conditions required by Islamic law.

Sharia Basis:

The at-cost sale (tevliye) contract is the transaction of selling a purchased good by specifying its cost price and without adding profit to it. This relationship between CBRT and the exporter through the participation bank coincides with the at-cost sale (tevliye) contract in terms of its operation process and results.

  1. The participation bank's commission collection in return for its operational costs is in line with the principles and standards of participation banking.

Sharia Basis:

Because, in this case, there is a transaction made by agent, and it is permissible for the agent to be paid in such a contract.

  1. Remaining the money received from CBRT in the participation bank accounts for a few days in some cases, and the usage of participation bank these funds during this period; in the absence of a provision preventing this in the relevant legislation and/or contract, it is not against the principles and standards of participation banking.

Sharia Basis:

This money, which the participation bank holds as an agent and intermediary is an example of the money and goods held by the classical bailment in Islamic law. As a rule, it has been acknowledged that if the holder of such money as bailment uses it, the damage liability of this money shall pass to the person who consumes/uses it. However, since there is always money to be substituted for this money in the accounts of the participation bank, there is no prohibition provision that requires the participation bank to keep the said amount in a special account as a "personally designated object" and make an effort not to consume it.

  1. The agency fee to be received by the participation bank is determined based on the mutual consent of the parties.

Sharia Basis:

The commission fee to be received by the participation bank from its exporter customer is due to a brokering service. In the agency contract, the fee is determined based on the consent of the parties.