The Centre for Islamic Finance

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 .

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 .

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. Since then, the Iranian banking system has operated on a profit-and-loss sharing basis, aligning all financial products and services with Islamic law .

Establishment and Founders

While there is no single "Centre for Islamic Finance" as an independent institution, the Iranian Association of Islamic Finance (IAIF) serves as a key body promoting Islamic finance research, education, and policy in Iran. Notable founding members include:

• Dr. Ali Salehabadi: President of the Board of Directors of IAIF, faculty member at Imam Sadiq University, and CEO of the Export Development Bank of Iran.
• Late Prof. Dr. Seyed Abbas Mousavian: Former Vice-President of the Board, faculty member at the Islamic Research Institute for Culture and Thought, and member of the Fiqh Council of the Central Bank.
• Dr. Seyed Ali Hosseini: Faculty member at Alzahra University and CEO of the Energy Exchange Co.

The Central Bank of Iran (CBI), established in 1960, is the primary financial sponsor and regulator for all Islamic banking activities in the country .

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 35. Major state-owned banks and financial institutions are the main actors in the sector.

Website and Contact Information

• Central Bank of Iran (CBI)
• Website: www.cbi.ir
• Address: CBI Tower, Tehran, Iran
• General inquiries and contact information can be found on the official website5.
• Iranian Association of Islamic Finance (IAIF)
• Website: www.iaif.ir
• Contact details are available on the IAIF website.

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:

• Ali Elyasi
• Golamhasan Taghi Nataj Malekshah
• Mohammad Salgi
• Akram Taftiyan
• Behzad Haji Hosseini
• Fatemeh Mansouri Mohammad Abadi
• Ali Aghajani Khorasgani
• Zahra Zamen Ghadirli
• Hamed Tajmir Riyahi
• Mohammadzaman Rostami
• Mohammad Hadi Rostami
• Seyed Mohammad Ali Torabi
• Mohammad Tahidi
• Golam Reza Mesbahi Moghadam

These individuals have contributed to over 94 published articles and numerous research projects in the field, shaping the discourse on Islamic finance in Iran.

Key Fields of Concentration (Research)

Iran’s research in Islamic finance focuses on:

• Development of Islamic and native financial literature
• Shariah-compliant financial instruments (e.g., Musharakah, Murabaha, Ijara)
• Risk-sharing and profit-and-loss models
• Ethical investment and avoidance of speculative activities (gharar) and prohibited sectors (haram)
• Policy reforms for banking governance and legal frameworks
• 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 45.

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 cooperation5.

Publishing/Significant Reports

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.
• Annual Islamic Banking Conference Proceedings: These include research papers, roundtable outcomes, and educational workshop materials, disseminating the latest studies in global Islamic finance46.
• Special reports: For example, "Islamic Banking in Iran: Opportunities and Challenges" by SpecialEurasia provides economic analysis and sectoral insights.
• 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.

Impacts and Partnerships

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 sanctions4.
• 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.
• 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.