The Centre for Islamic Finance: Difference between revisions

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 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>.

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.

* Central Bank of Iran (CBI)

* General inquiries and contact information can be found on the official website5.

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 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>.

* 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>.

* 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>.

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.