The Centre for Islamic Finance - Revision history

Peysepar at 11:43, 7 May 2025

2025-05-07T11:43:42Z

Peysepar: /* Critique on Iran’s Islamic Finance Framework and Perceived Challenges */

2025-04-29T09:08:09Z

Critique on Iran’s Islamic Finance Framework and Perceived Challenges

← Older revision		Revision as of 12:38, 29 April 2025
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	==Critique on Iran’s Islamic Finance Framework and Perceived Challenges==		==Critique on Iran’s Islamic Finance Framework and Perceived Challenges==
	1. Criticism of Operational Practices		1. Criticism of Operational Practices
	Iran’s Islamic banking system, often conflated with a centralized "Centre for Islamic Finance," faces critiques for structural inconsistencies and quasi-interest practices. Despite formal adherence to Shariah, critics argue that contracts like Murabaha (cost-plus financing) and Mozarebeh (profit-sharing) often replicate conventional interest-based loans, with fixed returns treated as de facto ~~interest3~~ <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. For example, banks pre-set profit rates in Mozarebeh agreements, undermining the risk-sharing principle central to Islamic ~~finance6~~.		Iran’s Islamic banking system, often conflated with a centralized "Centre for Islamic Finance," faces critiques for structural inconsistencies and quasi-interest practices. Despite formal adherence to Shariah, critics argue that contracts like Murabaha (cost-plus financing) and Mozarebeh (profit-sharing) often replicate conventional interest-based loans, with fixed returns treated as de facto interest<ref>SSRN. (2021). Islamic Banking System in Iran: A Critical Review. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3759107</ref> <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. For example, banks pre-set profit rates in Mozarebeh agreements, undermining the risk-sharing principle central to Islamic finance<ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>.

	2. Government Influence and Policy Challenges		2. Government Influence and Policy Challenges

Peysepar: /* Critique on Iran’s Islamic Finance Framework and Perceived Challenges */

2025-04-29T07:29:58Z

Critique on Iran’s Islamic Finance Framework and Perceived Challenges

← Older revision		Revision as of 10:59, 29 April 2025
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	==Critique on Iran’s Islamic Finance Framework and Perceived Challenges==		==Critique on Iran’s Islamic Finance Framework and Perceived Challenges==
	1. Criticism of Operational Practices		1. Criticism of Operational Practices
	Iran’s Islamic banking system, often conflated with a centralized "Centre for Islamic Finance," faces critiques for structural inconsistencies and quasi-interest practices. Despite formal adherence to Shariah, critics argue that contracts like Murabaha (cost-plus financing) and Mozarebeh (profit-sharing) often replicate conventional interest-based loans, with fixed returns treated as de facto ~~interest36~~. For example, banks pre-set profit rates in Mozarebeh agreements, undermining the risk-sharing principle central to Islamic finance6.		Iran’s Islamic banking system, often conflated with a centralized "Centre for Islamic Finance," faces critiques for structural inconsistencies and quasi-interest practices. Despite formal adherence to Shariah, critics argue that contracts like Murabaha (cost-plus financing) and Mozarebeh (profit-sharing) often replicate conventional interest-based loans, with fixed returns treated as de facto interest3 <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. For example, banks pre-set profit rates in Mozarebeh agreements, undermining the risk-sharing principle central to Islamic finance6.

	2. Government Influence and Policy Challenges		2. Government Influence and Policy Challenges
	The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation<ref>JIMF. (2021). Challenges facing Islamic banking in Iran: Evaluation... Journal of Islamic Marketing and Finance. https://jimf-bi.org/index.php/JIMF/article/view/1241</ref>6. This has led to non-performing loans and inefficiencies, particularly in financing non-productive ~~sectors6~~. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these ~~issues2~~.		The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation<ref>JIMF. (2021). Challenges facing Islamic banking in Iran: Evaluation... Journal of Islamic Marketing and Finance. https://jimf-bi.org/index.php/JIMF/article/view/1241</ref> <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors<ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues.

	3. Hidden Objectives and Systemic Concerns		3. Hidden Objectives and Systemic Concerns
	* Legitimization of Riba: Critics argue that Iran’s Islamic banking framework merely rebrands interest (riba) through terminology shifts, failing to eliminate exploitative financial ~~practices36~~.		* Legitimization of Riba: Critics argue that Iran’s Islamic banking framework merely rebrands interest (riba) through terminology shifts, failing to eliminate exploitative financial practices<ref>SSRN. (2021). Islamic Banking System in Iran: A Critical Review. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3759107</ref> <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>.
	* Sanctions Mitigation: The system is perceived as a tool to circumvent international sanctions by fostering self-reliance and reducing exposure to global financial ~~systems24~~. However, this has limited access to cross-border Islamic finance networks, isolating Iran from standardization bodies like AAOIFI~~[^see prior response]~~.		* Sanctions Mitigation: The system is perceived as a tool to circumvent international sanctions by fostering self-reliance and reducing exposure to global financial systems4. However, this has limited access to cross-border Islamic finance networks, isolating Iran from standardization bodies like AAOIFI.
	* Ideological vs. Economic Priorities: The emphasis on Shariah compliance sometimes overshadows financial innovation, resulting in a narrow product range and stagnation compared to global Islamic finance ~~hubs68~~.		* Ideological vs. Economic Priorities: The emphasis on Shariah compliance sometimes overshadows financial innovation, resulting in a narrow product range and stagnation compared to global Islamic finance hubs<ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>.

	4. Supervisory and Regulatory Shortcomings		4. Supervisory and Regulatory Shortcomings
	Iran’s financial oversight model faces criticism for its focus on formal compliance rather than substantive risk management. The "Islamic-Iranian model of financial monitoring" prioritizes adherence to jurisprudential rules (e.g., negation of excess) over systemic stability, creating vulnerabilities in credit risk ~~assessment7~~.		Iran’s financial oversight model faces criticism for its focus on formal compliance rather than substantive risk management. The "Islamic-Iranian model of financial monitoring" prioritizes adherence to jurisprudential rules (e.g., negation of excess) over systemic stability, creating vulnerabilities in credit risk assessment<ref>Ipoba. (n.d.). Criticism of the Islamic-Iranian model of financial monitoring... https://www.ipoba.ir/article_171280.html</ref>.

	==References==		==References==

Peysepar: /* Critique on Iran’s Islamic Finance Framework and Perceived Challenges */

2025-04-29T07:18:49Z

Critique on Iran’s Islamic Finance Framework and Perceived Challenges

← Older revision		Revision as of 10:48, 29 April 2025
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	2. Government Influence and Policy Challenges		2. Government Influence and Policy Challenges
	The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit ~~allocation16~~. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors6. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues2.		The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation<ref>JIMF. (2021). Challenges facing Islamic banking in Iran: Evaluation... Journal of Islamic Marketing and Finance. https://jimf-bi.org/index.php/JIMF/article/view/1241</ref>6. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors6. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues2.

	3. Hidden Objectives and Systemic Concerns		3. Hidden Objectives and Systemic Concerns
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	4. Supervisory and Regulatory Shortcomings		4. Supervisory and Regulatory Shortcomings
	Iran’s financial oversight model faces criticism for its focus on formal compliance rather than substantive risk management. The "Islamic-Iranian model of financial monitoring" prioritizes adherence to jurisprudential rules (e.g., negation of excess) over systemic stability, creating vulnerabilities in credit risk assessment7.		Iran’s financial oversight model faces criticism for its focus on formal compliance rather than substantive risk management. The "Islamic-Iranian model of financial monitoring" prioritizes adherence to jurisprudential rules (e.g., negation of excess) over systemic stability, creating vulnerabilities in credit risk assessment7.



	==References==		==References==

Peysepar at 06:12, 29 April 2025

2025-04-29T06:12:05Z

← Older revision		Revision as of 09:42, 29 April 2025
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	* Policy reforms for banking governance and legal frameworks		* Policy reforms for banking governance and legal frameworks
	* Infrastructure finance, SME support, and economic diversification		* Infrastructure finance, SME support, and economic diversification
	These areas are regularly discussed and developed at major conferences, such as the annual Islamic Banking Conference in Tehran, and through academic publications<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref> <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref> <ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>5.		These areas are regularly discussed and developed at major conferences, such as the annual Islamic Banking Conference in Tehran, and through academic publications<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref> <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref> <ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref> <ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.

	==Relations to the Islamic World==		==Relations to the Islamic World==
	Iran is a pioneer in Islamic finance, having established a fully Shariah-compliant banking system since the early 1980s. While the country’s approach is rooted in Shia jurisprudence, which sometimes differs from Sunni-majority countries, Iran maintains active engagement with global Islamic finance bodies. The IAIF has signed memoranda of understanding (MoUs) with international organizations such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the European Academy for Islamic Finance and Economics (EAIFE), and has organized joint workshops and sessions to enhance mutual understanding and cooperation<ref>The Diplomat. (2015, June). Iran and the Islamic Finance Crown. Retrieved from https://thediplomat.com/2015/06/iran-and-the-islamic-finance-crown/</ref>5.		Iran is a pioneer in Islamic finance, having established a fully Shariah-compliant banking system since the early 1980s. While the country’s approach is rooted in Shia jurisprudence, which sometimes differs from Sunni-majority countries, Iran maintains active engagement with global Islamic finance bodies. The IAIF has signed memoranda of understanding (MoUs) with international organizations such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the European Academy for Islamic Finance and Economics (EAIFE), and has organized joint workshops and sessions to enhance mutual understanding and cooperation<ref>The Diplomat. (2015, June). Iran and the Islamic Finance Crown. Retrieved from https://thediplomat.com/2015/06/iran-and-the-islamic-finance-crown/</ref> <ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.

	==Publishing/Significant Reports==		==Publishing/Significant Reports==
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	The Centre for Islamic Finance and its associated bodies have had significant impacts:		The Centre for Islamic Finance and its associated bodies have had significant impacts:
	* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref><ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref><ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development ~~efforts5~~.		* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development efforts<ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.
	* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* Policy Influence: Conferences and research outputs have informed government policy and regulatory reforms, helping align Iran’s financial sector with global Islamic finance standards and promoting sustainable economic ~~development5~~.		* Policy Influence: Conferences and research outputs have informed government policy and regulatory reforms, helping align Iran’s financial sector with global Islamic finance standards and promoting sustainable economic development<ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.

			==Critique on Iran’s Islamic Finance Framework and Perceived Challenges==
			1. Criticism of Operational Practices
			Iran’s Islamic banking system, often conflated with a centralized "Centre for Islamic Finance," faces critiques for structural inconsistencies and quasi-interest practices. Despite formal adherence to Shariah, critics argue that contracts like Murabaha (cost-plus financing) and Mozarebeh (profit-sharing) often replicate conventional interest-based loans, with fixed returns treated as de facto interest36. For example, banks pre-set profit rates in Mozarebeh agreements, undermining the risk-sharing principle central to Islamic finance6.

			2. Government Influence and Policy Challenges
			The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation16. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors6. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues2.

			3. Hidden Objectives and Systemic Concerns
			* Legitimization of Riba: Critics argue that Iran’s Islamic banking framework merely rebrands interest (riba) through terminology shifts, failing to eliminate exploitative financial practices36.
			* Sanctions Mitigation: The system is perceived as a tool to circumvent international sanctions by fostering self-reliance and reducing exposure to global financial systems24. However, this has limited access to cross-border Islamic finance networks, isolating Iran from standardization bodies like AAOIFI[^see prior response].
			* Ideological vs. Economic Priorities: The emphasis on Shariah compliance sometimes overshadows financial innovation, resulting in a narrow product range and stagnation compared to global Islamic finance hubs68.

			4. Supervisory and Regulatory Shortcomings
			Iran’s financial oversight model faces criticism for its focus on formal compliance rather than substantive risk management. The "Islamic-Iranian model of financial monitoring" prioritizes adherence to jurisprudential rules (e.g., negation of excess) over systemic stability, creating vulnerabilities in credit risk assessment7.

Peysepar at 06:04, 29 April 2025

2025-04-29T06:04:30Z

Peysepar at 05:54, 29 April 2025

2025-04-29T05:54:39Z

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 * Iranian Association of Islamic Finance (IAIF)
 * Website: www.iaif.ir
-* Contact details are available on the IAIF website4.
+* Contact details are available on the IAIF website.
 ==References==

Peysepar: /* History */

2025-04-28T11:09:28Z

History

← Older revision		Revision as of 14:39, 28 April 2025
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	==History==		==History==
	Iran was among the earliest adopters of Islamic banking following the 1979 Islamic Revolution. The transformation of the banking sector began in earnest in February 1981 when the CBI initiated steps to eliminate interest from banking operations. This culminated in the passage of the Law for Usury-Free Banking in August 1983, which mandated the conversion of all banking operations to comply with Shariah within three years. The transition was overseen by a commission of bankers, academics, business leaders, and religious scholars<ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>. Since then, the Iranian banking system has operated on a profit-and-loss sharing basis, aligning all financial products and services with Islamic law <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges.</ref><ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.		Iran was among the earliest adopters of Islamic banking following the 1979 Islamic Revolution. The transformation of the banking sector began in earnest in February 1981 when the CBI initiated steps to eliminate interest from banking operations. This culminated in the passage of the Law for Usury-Free Banking in August 1983, which mandated the conversion of all banking operations to comply with Shariah within three years. The transition was overseen by a commission of bankers, academics, business leaders, and religious scholars<ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>. Since then, the Iranian banking system has operated on a profit-and-loss sharing basis, aligning all financial products and services with Islamic law <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran.</ref> <ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.

	==Establishment and Founders==		==Establishment and Founders==

Peysepar at 11:08, 28 April 2025

2025-04-28T11:08:17Z

← Older revision		Revision as of 14:38, 28 April 2025
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	Overview		Overview
	The Centre for Islamic Finance in Iran operates within a financial system that is deeply rooted in Islamic principles, primarily governed by Shariah law, which prohibits interest (riba) and speculative investments (gharar), instead promoting profit-sharing and ethical investment models. Islamic finance plays a crucial role in Iran’s economic policy, supporting key sectors such as agriculture and manufacturing and helping the country navigate external pressures and sanctions by fostering domestic production and economic resilience <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges.</ref> <ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.		The Centre for Islamic Finance in Iran operates within a financial system that is deeply rooted in Islamic principles, primarily governed by Shariah law, which prohibits interest (riba) and speculative investments (gharar), instead promoting profit-sharing and ethical investment models. Islamic finance plays a crucial role in Iran’s economic policy, supporting key sectors such as agriculture and manufacturing and helping the country navigate external pressures and sanctions by fostering domestic production and economic resilience <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran.</ref> <ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.

	==Location==		==Location==

Peysepar: /* History */

2025-04-28T10:54:37Z

History

← Older revision		Revision as of 14:24, 28 April 2025
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	==History==		==History==
	Iran was among the earliest adopters of Islamic banking following the 1979 Islamic Revolution. The transformation of the banking sector began in earnest in February 1981 when the CBI initiated steps to eliminate interest from banking operations. This culminated in the passage of the Law for Usury-Free Banking in August 1983, which mandated the conversion of all banking operations to comply with Shariah within three years. The transition was overseen by a commission of bankers, academics, business leaders, and religious scholars<ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>. Since then, the Iranian banking system has operated on a profit-and-loss sharing basis, aligning all financial products and services with Islamic law <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges.</ref><ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan.</ref>.		Iran was among the earliest adopters of Islamic banking following the 1979 Islamic Revolution. The transformation of the banking sector began in earnest in February 1981 when the CBI initiated steps to eliminate interest from banking operations. This culminated in the passage of the Law for Usury-Free Banking in August 1983, which mandated the conversion of all banking operations to comply with Shariah within three years. The transition was overseen by a commission of bankers, academics, business leaders, and religious scholars<ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>. Since then, the Iranian banking system has operated on a profit-and-loss sharing basis, aligning all financial products and services with Islamic law <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges.</ref><ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.

	==Establishment and Founders==		==Establishment and Founders==

← Older revision		Revision as of 15:13, 7 May 2025
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	Overview		Overview
	The Centre for Islamic Finance in Iran operates within a financial system that is deeply rooted in Islamic principles, primarily governed by Shariah law, which prohibits interest (riba) and speculative investments (gharar), instead promoting profit-sharing and ethical investment models. Islamic finance plays a crucial role in Iran’s economic policy, supporting key sectors such as agriculture and manufacturing and helping the country navigate external pressures and sanctions by fostering domestic production and economic resilience <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran.</ref> <ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.		'''The Centre for Islamic Finance''' in [[Iran]] operates within a financial system that is deeply rooted in Islamic principles, primarily governed by Shariah law, which prohibits interest (riba) and speculative investments (gharar), instead promoting profit-sharing and ethical investment models. Islamic finance plays a crucial role in Iran’s economic policy, supporting key sectors such as agriculture and manufacturing and helping the country navigate external pressures and sanctions by fostering domestic production and economic resilience <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran.</ref> <ref>International Monetary Fund. (2021). Islamic Banking in the Islamic Republic of Iran and in Pakistan, https://www.elibrary.imf.org/display/book/9780939934829/ch002.xml.</ref>.

	==Location==		==Location==
	The main regulatory and supervisory authority for Islamic finance in Iran is the Central Bank of the Islamic Republic of Iran (CBI), located in Tehran. The CBI's headquarters is at CBI Tower, Tehran, ~~coordinates 35°45′29″N 51°26′07″E~~ <ref>Wikipedia. (2025, April 6). Central Bank of Iran</ref> <ref>Central Bank of Iran. (n.d.). General Information, https://www.cbi.ir/section/1372.aspx, https://www.cbi.ir/default_en.aspx.</ref>.		The main regulatory and supervisory authority for Islamic finance in Iran is the Central Bank of the Islamic Republic of Iran (CBI), located in Tehran. The CBI's headquarters is at CBI Tower, Tehran,<ref>Wikipedia. (2025, April 6). Central Bank of Iran</ref> <ref>Central Bank of Iran. (n.d.). General Information, https://www.cbi.ir/section/1372.aspx, https://www.cbi.ir/default_en.aspx.</ref>.

	==History==		==History==
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	==Financial Sponsors==		==Financial Sponsors==
	Islamic finance in Iran is primarily state-sponsored, with the Central Bank of Iran overseeing the sector. The government, through the CBI, provides regulatory, financial, and operational support to ensure compliance with Islamic law and economic policy objectives <ref>Wikipedia. (2025, April 6). Central Bank of Iran</ref>35. Major state-owned banks and financial institutions are the main actors in the sector.		[[Islamic finance]] in [[Iran]] is primarily state-sponsored, with the Central Bank of Iran overseeing the sector. The government, through the CBI, provides regulatory, financial, and operational support to ensure compliance with Islamic law and economic policy objectives <ref>Wikipedia. (2025, April 6). Central Bank of Iran</ref>35. Major state-owned banks and financial institutions are the main actors in the sector.

	==Website and Contact Information==		==Website and Contact Information==
	* Central Bank of Iran (CBI)		* [[Central Bank of Iran]] (CBI)
	* Website: www.cbi.ir		* Website: www.cbi.ir
	* Address: CBI Tower, Tehran, Iran		* Address: CBI Tower, Tehran, Iran
	* General inquiries and contact information can be found on the official ~~website5~~.		* General inquiries and contact information can be found on the official website.
	* Iranian Association of Islamic Finance (IAIF)		* Iranian Association of Islamic Finance (IAIF)
	* Website: www.iaif.ir		* Website: www.iaif.ir
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	==Prominent Research Figures==		==Prominent Research Figures==
	Iran’s Centre for Islamic Finance, particularly through platforms like the Iranian Association of Islamic Finance (IAIF) and the Journal of "Islamic Financial Research," features several leading scholars and practitioners:		Iran’s Centre for Islamic Finance, particularly through platforms like the [[Iranian Association of Islamic Finance]] (IAIF) and the Journal of "Islamic Financial Research," features several leading scholars and practitioners:
	* Ali Elyasi		* Ali Elyasi
	* Golamhasan Taghi Nataj Malekshah		* Golamhasan Taghi Nataj Malekshah
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	==Relations to the Islamic World==		==Relations to the Islamic World==
	Iran is a pioneer in Islamic finance, having established a fully Shariah-compliant banking system since the early 1980s. While the country’s approach is rooted in Shia jurisprudence, which sometimes differs from Sunni-majority countries, Iran maintains active engagement with global Islamic finance bodies. The IAIF has signed memoranda of understanding (MoUs) with international organizations such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the European Academy for Islamic Finance and Economics (EAIFE), and has organized joint workshops and sessions to enhance mutual understanding and cooperation<ref>The Diplomat. (2015, June). Iran and the Islamic Finance Crown. Retrieved from https://thediplomat.com/2015/06/iran-and-the-islamic-finance-crown/</ref> <ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.		[[Iran]] is a pioneer in [[Islamic finance]], having established a fully Shariah-compliant banking system since the early 1980s. While the country’s approach is rooted in Shia jurisprudence, which sometimes differs from Sunni-majority countries, Iran maintains active engagement with global [[Islamic finance]] bodies. The IAIF has signed memoranda of understanding (MoUs) with international organizations such as the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) and the European Academy for Islamic Finance and Economics (EAIFE), and has organized joint workshops and sessions to enhance mutual understanding and cooperation<ref>The Diplomat. (2015, June). [[Iran]] and the Islamic Finance Crown. Retrieved from https://thediplomat.com/2015/06/iran-and-the-islamic-finance-crown/</ref> <ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.

	==Publishing/Significant Reports==		==Publishing/Significant Reports==
	Iran’s Islamic finance community is prolific in publishing:		Iran’s Islamic finance community is prolific in publishing:
	* Journal of "Islamic Financial Research": Over 94 published articles, with hundreds more submitted and reviewed, focusing on Islamic finance theory, policy, and practice<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref>.		* Journal of "Islamic Financial Research": Over 94 published articles, with hundreds more submitted and reviewed, focusing on Islamic finance theory, policy, and practice<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref>.
	* Annual Islamic Banking Conference Proceedings: These include research papers, roundtable outcomes, and educational workshop materials, disseminating the latest studies in global Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* Annual Islamic Banking Conference Proceedings: These include research papers, roundtable outcomes, and educational workshop materials, disseminating the latest studies in global [[Islamic finance]]<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* Special reports: For example, "Islamic Banking in Iran: Opportunities and Challenges" by SpecialEurasia provides economic analysis and sectoral insights<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>.		* Special reports: For example, "Islamic Banking in Iran: Opportunities and Challenges" by SpecialEurasia provides economic analysis and sectoral insights<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>.
	* International recognition: Iranian banks and research outputs are frequently cited in global reports, such as those by The Banker and the Islamic Finance Development Report<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* International recognition: Iranian banks and research outputs are frequently cited in global reports, such as those by The Banker and the Islamic Finance Development Report<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
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	==Impacts and Partnerships==		==Impacts and Partnerships==
	The Centre for Islamic Finance and its associated bodies have had significant impacts:		The Centre for Islamic Finance and its associated bodies have had significant impacts:
	* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref><ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). [[Islamic Banking]] in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref><ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development efforts<ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.		* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development efforts<ref>Iranian Association of Islamic Finance (IAIF). (2023). IAIF Holds 9th Islamic Finance Conference. Retrieved from https://iaif.ir/index.php/en/conferences-en/conferences2/item/5265-iaif-to-hold-9th-islamic-finance-conference</ref>.
	* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.		* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
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	2. Government Influence and Policy Challenges		2. Government Influence and Policy Challenges
	The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. The Central Bank of Iran (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation<ref>JIMF. (2021). Challenges facing Islamic banking in Iran: Evaluation... Journal of Islamic Marketing and Finance. https://jimf-bi.org/index.php/JIMF/article/view/1241</ref> <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors<ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues.		The state-dominated banking model is criticized for prioritizing political objectives over economic efficiency. [[The Central Bank of Iran]] (CBI) mandates strict compliance with Islamic principles, yet critics highlight excessive governmental intervention, which distorts risk assessment and credit allocation<ref>JIMF. (2021). Challenges facing [[Islamic banking]] in Iran: Evaluation... Journal of Islamic Marketing and Finance. https://jimf-bi.org/index.php/JIMF/article/view/1241</ref> <ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. This has led to non-performing loans and inefficiencies, particularly in financing non-productive sectors<ref>IOSR Journal. (n.d.). Evolution of Islamic Banking in Iran: Prospects and Problems. https://www.iosrjournals.org/iosr-jbm/papers/Vol17-issue9/Version-2/F017926166.pdf</ref>. The 34th Islamic Banking Conference acknowledged the need for governance reforms to address these issues.

	3. Hidden Objectives and Systemic Concerns		3. Hidden Objectives and Systemic Concerns

← Older revision		Revision as of 09:34, 29 April 2025
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	* Policy reforms for banking governance and legal frameworks		* Policy reforms for banking governance and legal frameworks
	* Infrastructure finance, SME support, and economic diversification		* Infrastructure finance, SME support, and economic diversification
	These areas are regularly discussed and developed at major conferences, such as the annual Islamic Banking Conference in Tehran, and through academic publications<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref> <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>45.		These areas are regularly discussed and developed at major conferences, such as the annual Islamic Banking Conference in Tehran, and through academic publications<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref> <ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref> <ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>5.

	==Relations to the Islamic World==		==Relations to the Islamic World==
Line 62:		Line 62:
	Iran’s Islamic finance community is prolific in publishing:		Iran’s Islamic finance community is prolific in publishing:
	* Journal of "Islamic Financial Research": Over 94 published articles, with hundreds more submitted and reviewed, focusing on Islamic finance theory, policy, and practice<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref>.		* Journal of "Islamic Financial Research": Over 94 published articles, with hundreds more submitted and reviewed, focusing on Islamic finance theory, policy, and practice<ref>Islamic Financial Research. (2025). About the Journal. Retrieved from https://ifr.isu.ac.ir/?lang=en</ref>.
	* Annual Islamic Banking Conference Proceedings: These include research papers, roundtable outcomes, and educational workshop materials, disseminating the latest studies in global Islamic ~~finance46~~.		* Annual Islamic Banking Conference Proceedings: These include research papers, roundtable outcomes, and educational workshop materials, disseminating the latest studies in global Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* Special reports: For example, "Islamic Banking in Iran: Opportunities and Challenges" by SpecialEurasia provides economic analysis and sectoral insights<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>.		* Special reports: For example, "Islamic Banking in Iran: Opportunities and Challenges" by SpecialEurasia provides economic analysis and sectoral insights<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>.
	* International recognition: Iranian banks and research outputs are frequently cited in global reports, such as those by The Banker and the Islamic Finance Development ~~Report6~~.		* International recognition: Iranian banks and research outputs are frequently cited in global reports, such as those by The Banker and the Islamic Finance Development Report<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.

	==Impacts and Partnerships==		==Impacts and Partnerships==
	The Centre for Islamic Finance and its associated bodies have had significant impacts:		The Centre for Islamic Finance and its associated bodies have had significant impacts:
	* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref>4.		* Domestic Impact: Shariah-compliant finance has become the backbone of Iran’s financial sector, supporting agriculture, manufacturing, and infrastructure, and contributing to economic resilience amid sanctions<ref>SpecialEurasia. (2024, September 23). Islamic Banking in Iran: Opportunities and Challenges. Retrieved from https://www.specialeurasia.com/2024/09/23/islamic-banking-iran/</ref><ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development efforts5.		* International Partnerships: The IAIF has established collaborations with leading Islamic finance organizations worldwide, promoting standardization and knowledge exchange. These partnerships include joint research, workshops, and policy development efforts5.
	* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic ~~finance6~~.		* Recognition: Iranian banks, such as Bank Mellat, have been recognized as among the largest Shariah-compliant lenders globally, underscoring the country’s influence in Islamic finance<ref>Press TV. (2024, September 10). Islamic banking in ascendancy: The case of Iran. Retrieved from https://www.presstv.ir/Detail/2024/09/10/733019/Islamic-banking-in-ascendancy--The-case-of-Iran---</ref>.
	* Policy Influence: Conferences and research outputs have informed government policy and regulatory reforms, helping align Iran’s financial sector with global Islamic finance standards and promoting sustainable economic development5.		* Policy Influence: Conferences and research outputs have informed government policy and regulatory reforms, helping align Iran’s financial sector with global Islamic finance standards and promoting sustainable economic development5.