Islamic Banking

The Iranian banking industry has completely been regulated by Sharia principles and is by far the world’s largest center of Islamic banking. Conventional banking in Iran was converted into Islamic banking in 1979 and since then the entire banking system in Iran has been Shariah-compliant. In 1983, the law of usury-free banking dubbed Law for Usury (Riba) Free Banking of the Islamic Republic of Iran was passed urging local banks to rebuild their business models within the Sharia-compliant framework.

The main concept of Islamic finance is based on the model of profit-and-loss sharing (PLS) basis such as Qard-al-Hassanah accounts and term deposits with no Riba (interest). In regard to lending, banks offer various models of financing using Islamic contracts, mostly in form of civil partnership, without a pre-determined lending rate (settlement is based on the real rate of return after the implementation of projects and ventures) and with banks’ supervision as partners in projects or ventures.


The Shariah Council of the CBI, comprising three erudite scholars professional in Islamic finance, three members from the CBI, two experts in legal and economic fields, one representative on behalf of the banks in Iran, and one member of the parliament, is in charge of developing Islamic banking products and also making sure that the entire banking processes and procedures are compliant with Shariah principles.


In addition to non-interest bearing (Riba-free) accounts, IVVB offers the following Islamic contrasts to its customers in the form of partnership or fixed profit models.

Below there is a comparison between IVBB’s portfolio composition in terms of Islamic contract types between two spans of time 2019/03/20 to 2020/03/19:

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