Islamic Banking: Experiences in the Islamic Republic of Iran and Pakistan

International Monetary Fund

No 1989/012, IMF Working Papers from International Monetary Fund

Abstract: In an Islamic system, as interest is prohibited, banks are expected to operate solely on the basis of profit and risk sharing. This paper describes the developments in Islamic banking in Iran and Pakistan. As these two countries have initiated the most far-reaching experiments with Islamic banking, their experiences have a significant bearing on the feasibility of such a system. The developments in these countries are evaluated against the theory underlying the Islamic banking, and suggestions are made to achieve a more efficient system.

Keywords: WP; rate of return; profit sharing; financing; asset acquisition; profit-sharing financing; resource allocation; rates of return on equity; bank portfolio; rate-of-return regulation; rates of return to the banking system; profit-sharing provision; profit performance; bank Marakazi; bank Markazi; banking operations; Commercial banks; Islamic banking; Credit; Bank deposits; Islamic finance (search for similar items in EconPapers)
Pages: 30
Date: 1989-01-01
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Citations: View citations in EconPapers (10)

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