Economy, Business And Markets

Interest-Free Debit Cards Banned

Interest-Free Debit Cards BannedInterest-Free Debit Cards Banned

The Central Bank of Iran (CBI) has reversed its decision dating back to 2008 and placed a ban on the recharge and issuance of new debit cards based on interest-free banking contracts, according to the CBI news portal. The decision comes in light of Islamic teachings and instructions that restrict the use of interest-free banking facilities to help individuals meet their basic needs including employment, medical treatment and marriage. While the rechargeable nature of these debit cards makes it possible to also cover secondary expenses that are supposed to be met through other services as envisaged by the CBI. Therefore, the CBI has decided to review its earlier decision and halt the recharge of existing cards and issuance of new ones. In its directive addressed to all the banks in the country, the central bank has also clarified that interest-free banking loans and facilities should be granted under contracts rather than debit cards.