Economy, Business And Markets

New Legislation Against Usury Banking

New Legislation Against Usury Banking New Legislation Against Usury Banking

The spokesman of the economic committee of the parliament, Rahim Zare’, announced that a motion on usury-free banking was approved Sunday on the floor, a move that would limit usury banking operations across the country.

Before the voting session, the governor of the Central Bank of Iran, Valliollah Seif, and his deputies attended the parliament to discuss the issue.

In 1983 the CBI submitted a proposal of an Islamic banking system to the parliament which was approved later. Under the law, Iranian banks should only engage in usury-free transactions. The new motion was aimed at amending the usury-free banking law, which has come under criticisms in recent years.

The new legislation urges officials to establish specialized institutions that can provide enterprises with financing services compatible with the Islamic law, Zare’ said. “The institutions’ bylaws should be first approved by the administration,” IRNA quoted him as saying.

Many in the Iranian government believe that usury could have disastrous impacts on the economy, pressing for a policy that denounces the expansion of usury banking.