Economy, Business And Markets

Fiqh Council to Promote Trust in Banking Sector

Fiqh Council to Promote Trust in Banking Sector
Fiqh Council to Promote Trust in Banking Sector

A senior member of the Central Bank of Iran’s Fiqh Council hoped that with the newly-enhanced legal status of the council, it can soon begin its efforts in an official vein and increase people’s trust in the banking system.

“With the council operating at an official level, the Muslim population and senior clerics’ concerns regarding the performance of the banking system will be reduced,” Seyyed Abbas Mousavian was quoted as saying by IBENA.

“The Fiqh Council can be the bridge linking the Central Bank of Iran, the banking system and the religious authorities.”

This week Gholamreza Mesbahi-Moqaddam– another Fiqh Council member– announced on his Instagram page that the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei had called on according official status to the Fiqh Council and making its decisions legally binding. The council previously played only an advisory role.  

“Sharia-related issues within banking operations will be discussed and with clarification and transparency, misunderstandings about the performance of the banking system will be removed,” Mousavian said.  

“With this trend, people’s trust and confidence in the banking system will increase.”

While Iran’s banking system follows Islamic principles, concerns about the compatibility of some of the practices with Sharia have prompted some to call for a stronger role of CBI’s Fiqh Council.

Mousavian noted that the council was formed about 10 years ago, but did not have a legal and official status.

“Unfortunately, in the case of Usury-Free Banking Law and other banking laws in the country, no official entity called the Fiqh Council has ever been considered,” he said.

“Even with all the efforts made by CBI officials in holding meetings and keeping the council operational, its meeting were held irregularly, with its directives having no legal and official status.”

Mousavian added that in the plan recently devised by the Majlis Economic Commission to reform the rules and regulations of Usury-Free Banking Law, the Fiqh Council has been mentioned and a separate article has been devoted to this issue.

“Parts of the bill recently drawn up by the CBI and the Ministry of Economic Affairs and Finance, which is soon to be submitted to the parliament, pertain to the Fiqh Council and the way it should take shape,” he said.

The Banking Reform Bill, devised by the pervious parliament, had envisioned the creation of Fiqh Council that was opposed by the government, as it believed the council would complicate decision-making in the banking system.

As defined in the bill, the council comprises the CBI governor, his deputy for supervisory affairs, five Muslim clerics with expertise in banking and monetary issues and a legal expert.

Simplifying banking services, improving efficiency, adjusting interest rates with real economic conditions and upholding Islamic banking norms are among other measures envisioned in the bill.