Monetary and Banking Research Institute
Date:3/6/2019 9:14:09 AM   |   Code : 294298   |   View: 598

Islamic Banking (2): Islamic Central Banking and Monetary and Exchange Rate Policy-Making (The Central Bank of Iran, 2016-2017)


Executive Summary:

The evaluation of Islamic banking and finance and banking researches over the past three decades shows that the focus of the research is mainly on “Islamic Commercial Banking”. In fact, during this period, researchers have tried to criticize the methods used to regulate the relationship between commercial banks and the depositors and facilitators in terms of Islamic Shari’a and come up with alternative methods, which (in addition to being executable) have jurisprudential legitimacy.

Accordingly, researches about the new and important field of ​​ Islamic Central Banking are few and scattered. In fact, there are very few studies which have focused on the Central Bank's activity and analyzed its relationship with the government, banks, and the public from the Islamic perspective. Meanwhile, the impact of Central Bank's activity on the general public is far more than a commercial bank, and for this reason, the Islamic activities of the this bank (especially the tools used) is more important.

Considering the above, the second volume of Islamic Banking book is dedicated to the Islamic Central Banking. This research has tried to analyze the theoretical foundations of the Central Bank’s activities and the most important issues in the activities of the bank (such as the creation of money) from the Islamic perspective. In addition, conventional tools used by central banks to conduct monetary and exchange policies are analytically criticized from Islamic perspective and new and alternative tools are suggested.

The present research has basic features, some of which are:

A-The book has the essence of research; that is, the most important issues discussed by central bankers are investigated from jurisprudential point of view. In case of a jurisprudential challenge, efforts are made to present related solutions using the capacities of Islamic jurisprudence. In other words, in cases where it is proved that conventional tools and practices are incompatible with Islamic rules, alternative Islamic methods and practices are designed and suggested.

B-The present research, along with the research approach, also has an educational approach; that is, due to the lack of educational resources in the field of Islamic Central Banking in Farsi, it tries, with consideration of some features, to provide a source of study or supplement book (for graduate courses in related disciplines); for example, at the beginning of each chapter, goals are presented and, at the end of the chapter, questions are offered. In addition, in each chapter, along with the sources used, some extra resources are suggested for the interested readers.

C-The present book tries to pay special attention to the operationalization of Islamic Central Banking, in accordance with the Shari'a (over and above discussing the theoretical and jurisprudential topics related to various issues of Islamic Central Banking). For this reason, in various topics, the experiences of Islamic and non-Islamic countries (if any) are discussed.

D- The present book discusses Islamic Central Banking for Iran's banking system. In almost all topics, the experience of the banking system of the country is specifically mentioned and efforts are made to present policy recommendations to the policy-makers for the implementation of Islamic Central Banking.

E- In compilation of the topics of this research, it is tried to consider the compatibility with the Islamic jurisprudence and the Law of Usury-Free Banking as much as possible and this pave the way for better implementation of the research achievements.

The research structure is that the First Discourse (including three chapters) addresses the generalities and foundations associated with Islamic Central Banking, in which important topics such as the Islamic money market and the usury and interest are discussed. The Second Discourse (including two chapters) is devoted to the pathology of the experience of Iran and some of the other Islamic countries in the implementation of central banking in the Shari'a framework. The Third Discourse (consisting of five chapters) criticizes the conventional monetary policy tools from the jurisprudential point of view and the design of new Islamic instruments and, from a practical perspective, forms the most important part of the research. The analysis of foreign exchange tools and currency policy is followed up in the Fourth Discourse (including two chapters). In this part, the issue of Islamic derivatives markets is discussed. The Fifth Discourse (including five chapters) examines and analyzes some of the important and complementary topics in Islamic Central Banking, which include the creation of money, compensation for depreciation of money, property unification, and Iran’s central banking rules analysis. The final chapter is devoted to conclusions, policy recommendations, and unresolved questions in the field of Islamic Central Banking for future research.

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