In the Ottoman Empire, economic activities such as Treasury operations, money and credit transactions and trade in gold and foreign currencies were executed by various establishments such as the Treasury, the Mint, jewelers, moneylenders, foundations and guilds. In this organizational structure that prevailed until the second half of 19th century, the Ottoman Empire minted gold coins on behalf of the Sultan.
The Ottoman Empire put cash banknotes (Kaime-i nakdiye-i mutebere) into circulation in 1840.
During the Crimean War, in 1854, the Ottoman Empire, which borrowed from other nations for the first time in history, needed a state bank to assume an intermediary function in the repayment of external debts. As a result, the “Ottoman Bank (Bank-ı Osmanî)”, headquartered in London, was established with English capital in 1856. The fundamental powers of the Bank were limited to lending in small amounts, making advance payments to the Government and discounting some Treasury bills.
In 1863, the Ottoman Bank was dissolved and restructured as an English-French partnership under the name “Bank-ı Osmanî-i Şahane (Imperial Ottoman Bank)” and became a state bank. The Imperial Ottoman Bank was granted the sole privilege of issuing banknotes for a period of thirty years. The Bank, acting as Treasurer of the State, was assigned to collect State revenues, make payments on behalf of the Treasury and discount Treasury bills, as well as making interest and principal payments pertaining to domestic and foreign debts.
The capital of the Imperial Ottoman Bank retained by other nations triggered reactions in time and these reactions laid the foundation for establishing a national central bank. Efforts towards establishing a central bank with domestic capital culminated in the establishment of the “Ottoman National Credit Bank (Osmanlı İtibar-ı Millî Bankası)” on 11 March 1917. However, the defeat of the Ottoman Empire in the First World War prevented the bank from becoming a national bank, which would have assumed central bank functions.