Incentives for Savings in the Turkish Banking Sector: Lottery 1930-1975

In the short history of banking sector in Turkey, lottery (premium to the accounts by drawings) had a crucial role in attracting savings to the bank accounts between 1930 and 1975. Lottery practice has not only increased household savings but also stimulated and changed traditional saving habits of the Turkish people. After the Second World War, saving account interest rate was below the inflation rate. Consequently banks chose to offer special advantages for enticing account holders. A lottery system was effectively and extensively used for attracting new customers to the banks. Banks offered real estates, apartments, houses, gold, household items and other merchandises through lottery. In 1950s, lottery went out of control and caused some serious credibility problems in the banking sector. After 1958, it was closely controlled by the Central Bank and cancelled in 1975.