The 27th Islamic Banking Conference will be held in Tehran on August 30 with a focus on interaction of usury-free banking with international banking.
The two-day annual event will be attended by experts, university professors and monetary analysts.
Commenting on the reason for selecting this theme for the conference, Mohsen Khoshtinat, secretary of the conference, referred to the passage of the Usury-Free Banking Law in 1983 and said it was a hallmark of economic and banking achievements of the country, the official website of CBI reported.
In the conference, well-known academic and banking individuals on a local and international level will discuss Islamic banks' experience and challenges of the country's banking system in interacting with the regulations of international banking.
Ways to reform the country's banking infrastructures, the health of banking system, creation of entities and instruments to help forge cooperation with international banking, solutions to diversify operations and development of services pertaining to international banking are also on the confab's agenda.
"The Islamic Banking Conference will create a bedrock upon which scholars and pundits can share the results of their studies with other experts, as well as economic and banking policymakers," Khoshtinat said.
Global Standards
The secretary of the conference emphasized the importance of major global banks entering Iran and said if this happens, Iranian lenders will be exposed to cutting edge standards that would in turn increase their efficiency.
"At present, the performance of our banking system is far from international standards in areas of capital adequacy, liquidity ratios and non-performing loans," he said.
One of the reasons for this, he believes, is a lack of serious and professional competitiveness between major global banks and Iran's banking system, which has showed itself in the inefficiency of the country's beleaguered banks.
"Therefore, one of the salient effects of major international banks entering Iran's economy would be that our banks will be exposed to the operations of banks with high standards and efficiency. This could lead to tangible results such as improvement in the performance of the workforce, betterment of corporate infrastructure and the improvement of banking procedures," he said.
"It is obvious that any interaction with the international banking network will require the harmonization of banking operations with Islamic values. That is why Islamic countries strived to do this by founding Islamic monetary institutions such as AAOIF (Accounting and Auditing Organization for Islamic Financial Institutions) and studying the experiences of these countries, which could be a suitable guide for officials and policymakers."
Khoshtinat, who is also the head of the Iran Banking Institute affiliated with CBI, noted that banking is one of the most complicated areas of the economy heavily influenced by different kinds of rules and regulations set by banking regulators.
"Regulations pertaining to the Basel Committee on Banking, money-laundering and financing of terrorism and standards related to financial statements have presented us with challenges," he added.
Asked about the Central Bank of Iran's role in improving the stability and general health of the country's banking system, he said aside from adopting monetary and exchange policies, one of the main functions of the central banks of any country is to set precautionary regulations.
"Previous experiences of many countries show that shortcomings in adhering to standards for the stability and health of the banking system will increase the chances of a banking crisis," he said.
"Many economic experts believe that problems pertaining to the banking sector, which are caused by the failure in observing standards, will lead to an economic recession."
Khoshtinat noted that in addition to long-term educational programs, seminars and conferences, Iran Banking Institute disseminates up-to-date knowledge about banking.
