Banking

  


1- The law for Usury Free Banking was approved on 30th August 1983. The purpose of the Law, apart from monetary aims, was to abolish interest as it is customary in normal banking systems.

2- The law authorises banks to accept deposits in two forms either as Gharzol-Hassaneh ( no interest bearing deposit) in current or saving forms or term Investment Deposit (interest bearing). Current Gharzol-Hassaneh accounts are the same as cheque book current accounts and term Investment Deposits are similar to normal bank deposit accounts.

3- Banks are permitted to provide credit facilities through predefined systems which follows the Islamic Code. These predefined contracts by which credit., facilities can be provided are as follows:

 

The title of the contract

Purpose for which
The credit facilities can be used for

  
 

Mozarebeh

Commercial activities
(interest bearing)

  
 

Gharzol-Hassaneh

Mainly for humanitarian purposes
(interest free)

  
 

Forward deals (futures)

All activities and goods
(interest bearing)

  
 

Joaalah

Service activities
(interest bearing)

  
 

Mosaqat

Agricultural activities
(interest bearing)

  
 

Mozaraah

Agricultural activities
(interest bearing)

  
 

Civil partnership (joint venture)

Industrial, agricultural, mining, housing and

services activities (interest bearing)

  
 

Hire purchase

All activities-supplies of goods and machineries (interest bearing)

  
 

Legal partnership
(direct investment with all persons)

All activities-investments

  
 

Direct investment

(with other banks only)

All activities- investments

  

 
 

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