Islamic banking Banking and insurance in Iran

in theory, iranian banks use provisional interest-based transactions retain accounting standards of conventional banking. in 2009, iranian banks accounted 40 percent of total assets of world s top 100 islamic banks. 3 of leading 4 islamic banks based there; bank melli iran, assets of $45.5 billion came first, followed saudi arabia s al-rajhi bank, bank mellat $39.7 billion , bank saderat iran $39.3 billion. “iranian banks still predominant islamic banking players, holding 7 out of top 10 ranks , 12 of 100,” asian banker research group reported. according cimb group holdings, islamic finance fastest-growing segment of global financial system , sales of islamic bonds predicted rise 24 percent $25 billion in 2010. yet, of iran s financial resources directed @ trading, smuggling , speculation instead of production , manufacturing.

commercial banks

commercial banks authorized accept checking , savings deposits , term investment deposits, , allowed use promotional methods attract deposits. term investment deposits may used banks in variety of activities such joint ventures, direct investments, , limited trade partnerships (except underwrite imports). however, commercial banks prohibited investing in production of luxury , nonessential consumer goods. commercial banks may engage in authorized banking operations state-owned institutions, government-affiliated organizations, , public corporations. funds received commissions, fees, , returns constitute bank income , cannot divided among depositors. according central bank of iran, financial sector has $260 billion of liquidity, or 65% of gdp of iran’s economy.

derivatives market

as of 2009, iranian oil bourse spot market petrochemical products mainly, plans introduce sharia-compliant futures contracts crude oil , petrochemicals in future. trading takes place through licensed private brokers registered securities , exchange organization of iran. of bahrain-based international islamic financial market , new york-based international swaps , derivatives association, global standards islamic derivatives set in 2010. “hedging master agreement” provides structure under institutions can trade derivatives such profit-rate , currency swaps. while standards of bahrain-based accounting , auditing organization islamic financial institutions (aaoifi) followed around world, not enforced in iran.