Monetary and Banking Research Institute
Date:2/20/2019 3:11:24 PM   |   Code : 294227   |   View: 439

Assessing the current operations of Qarz Al-Hassaneh Mehr Iran Bank in terms of compliance with the Shari'a and designing the Sharia Supervision Model (Qarz Al-Hassaneh Mehr Iran Bank, 2017-2018)


Executive Summary:

An assessment of the Iran’s banking system over the past three decades has shown that although a lot of positive efforts have been made for the implementation of Islamic banking, there are still challenges for the Islamic performance of banks and credit institutions. Perhaps because of the same challenges, the elites, the clerics (and jurists) and even the public are skeptical about the functioning of the Islamic banking system. In fact, it can be argued that the current state of implementation of the usury-free banking system in the country is far from the ideal model of Islamic banking, which has been widely emphasized in the theoretical literature of Islamic economics and finance.

The main question to ask is: what are the plans that banks and credit institutes need to have in order to fully operate in the framework of Islamic standards?

In this regard, via successful patterns and failed experiences in other Islamic countries, Qarz Al-Hassaneh Mehr Iran Bank is chosen as one of the most successful banks in the country and, through specific and timely reforms, it is attempted to make the standard model of Islamic banking in the country.

The main questions of the present research are:

1.     Are the current tools and practices used by Qarz Al-Hassaneh Mehr Iran Bank to provide resources, in compliance with the Shariah rules?

2.     Are the current tools and practices used by Qarz Al-Hassaneh Mehr Iran Bank in order to allocate resources, in compliance with the Shariah rules?

3.     Are the current tools and practices used by Qarz Al-Hassaneh Mehr Iran Bank to provide services, in compliance with the Shariah rules?

4.     What is the proper model of Shariah supervision for Qarz Al-Hassaneh Mehr Iran Bank, based on Islamic banking principles?

Considering the motivation of the banking system authorities to adapt to the religious standards and to eliminate the legal gaps and the operational weaknesses of the usury-free banking system, the output of this project is the current activities of the Qarz Al-Hassaneh Mehr Iran Bank from the point of view of compliance with the Shariah. This research aims at designing the Shriah supervision structure to convert Qarz Al-Hassaneh Mehr Iran Bank into a standard model of Islamic bank in the country.

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