Banks in the Ottoman Empire

Mavi Boncuk |

During the second half of the nineteenth century, a number of smaller banks were also set up in Istanbul with names such as the Osmanli Umumi Nafia Bankasi (The Ottoman Bank of Public Works) and the Osmanli Ticaret Kumpanyasi (The Ottoman Trade Company). Some banks had foreign names such as Avusturya Sark Bankasi (The Austrian Oriental Bank), Italyan Sark Ticaret Bankasi (The Italian Oriental Trade Bank), and the Rus Bankasi (The Russian Bank). 

There were also some local banks such as The Bank of Salonika (or Banque de Salonique). It was founded by Jews, French and Belgians in 1888 with a capital of 2 million French Francs. This bank played an important role particularly organizing itself as a joint stock company. It had a total of 14 branches and bureaus throughout the country. At the baginning of the 20th century, a number of small-scale banks were in business. These bank ca be listed as follows:

National Banks in the Ottoman Empire

Name of the Bank | Year of Estalishment
Türkiye Milli Bankasi (National Bank of Turkey) 1909
Filistin Ticaret Bankasi (Commercial Bank of Palestine) 1909
Türkiye Ticaret ve Sanayi Bankasi (Commercial and Industrial Bank of Turkey) 1910
Osmanli Itibari Milli Bankasi (Bank of National Trust) 1910
Konya Iktisadi Milli Bankasi (National Economy Bank of Konia) 1911
Osmanli Ticaret Bankasi (Ottoman Commercial Bank, 1911) 1911
Umuru Ticariye ve Maliye (Commercial Industrial and Financial Affairs) 1913
Milli Aydin Bankasi (National Bank of Aydin) 1914

(Source. TFH, Vol. 1, p. 273).

Foreign banks also opened branches and bureaus during the period. Among these can be cited, Credit Lyonnais, Deutche Bank, Deutche Orient Bank, Wiener Bank Verein as the most important ones. However, perhaps the most important development in the Ottoman Banking system was the foundation of the Emniyet Sandi¤i (Security Chest or Confidence Union), which later lead to the establishment of the biggest bank of Turkey called Ziraat Bankasi. 

This bank was set up as result of the effort of Midhat Pasha in order to provide low interest loans to farmers utilizing guarantees and secured deposits or pledges as security. An important aspect of the Emniyet Sandigi was that its capital of 200 gold mecidiyes was entirely Turkish. Founded in the town of Pirot in Nish, the bank soon opened branches in the Danube provinces and later on in every district of the empire under the name of Menafi Sandigi (Public Improvements Chest). In 1868, the government decided to gather all these district branches under the name of the Ziraat Bankasi, again thanks to the efforts of Midhat Pasha. The necessary legislation was enacted and became effective on August 15, 1888. 

The bank had no real capital at the beginning and relied upon the individual savings deposit. It offered nine-percent interest on small-size deposits and 12 per cent against secured or guaranteed deposits, but later on its capital was fixed at 10 million liras. In 1907 when the Security Chest was attached, the bank had grown into a major bank. According to the statistics, it held a deposit of 48 million piastres in 1913, with a total nominal capital of 1173 million piastres, slightly higher than that of Ottoman Bank, which had 1100.