The Islamic Economics Organization of Iran (, formerly Islamic Bank of Iran) or simply the Organization of Islamic Economics was the first

Islamic banking Islamic banking, Islamic finance ( ''masrifiyya 'islamia''), or Sharia-compliant finance is banking or financing activity that complies with Sharia (Islamic law) and its practical application through the development of Islamic economics. Some ...

institution created in 1979 after the

Islamic Revolution The Iranian Revolution (, ), also known as the 1979 Revolution, or the Islamic Revolution of 1979 (, ) was a series of events that culminated in the overthrow of the Pahlavi dynasty in 1979. The revolution led to the replacement of the Im ...

. The organization acts as a

Central Bank A central bank, reserve bank, national bank, or monetary authority is an institution that manages the monetary policy of a country or monetary union. In contrast to a commercial bank, a central bank possesses a monopoly on increasing the mo ...

for issuing Qard al-Hasan (Islamic loan funds), and was exempted from

nationalization Nationalization (nationalisation in British English) is the process of transforming privately owned assets into public assets by bringing them under the public ownership of a national government or state. Nationalization contrasts with p ...

by the decree of

Ruhollah Khomeini Ruhollah Musavi Khomeini (17 May 1900 or 24 September 19023 June 1989) was an Iranian revolutionary, politician, political theorist, and religious leader. He was the founder of the Islamic Republic of Iran and the main leader of the Iranian ...

. The creation of this organization marked the first move towards establishing a parallel system in the banking sector, operating outside the purview of the

Central Bank of Iran The Central Bank of the Islamic Republic of Iran (CBI; ; SWIFT Code: BMJIIRTH), also known as ''Bank Markazi'', was established under the Iranian Banking and Monetary Act in 1960. It serves as the banker to the Iranian government and has the e ...

. It currently supervises 1200, out of 2500 Islamic loan funds, on behalf of Iran's Central Bank.

History

Background

Mir-Muhammad Sadeghi, a prominent member of '' Mo’talefah'' and a supporter of Khomeini from the

Bazaari Bazaari ( Persian: بازاری) is the merchant class and workers of bazaars, the traditional marketplaces of Iran. Bazaari are involved in "petty trade of a traditional, or nearly traditional, kind, centered on the bazaar and its Islamic cultur ...

class, played an active role in establishing Islamic loan funds both before and after the revolution. Shortly following the revolution, he was appointed to lead the Islamic Economics Organization.

Establishment

The Islamic Bank of Iran was established in April 1979 by order of Seyyed Ruhollah Khomeini, with the support of

Mohammad Beheshti Sayyed Mohammad Hosseini Beheshti (; 24 October 1928 – 28 June 1981) was an Iranian jurist, poetic philosopher, cleric and politician who was known as the second person in the political hierarchy of Iran after the Revolution. Beheshti is co ...

and

Morteza Motahari Morteza Motahhari (; 31 January 1919 – 1 May 1979) was an Iranian Twelver Shia scholar, philosopher, lecturer. Motahhari is considered to have an important influence on the ideologies of the Islamic Republic, among others. He was a co-found ...

. Following the Leader of the Islamic Republic's authorization to establish the bank, a statute was drafted with input from legal and banking experts and submitted to the Central Bank and the Monetary and Credit Council for approval. The Council unanimously approved the statute in a meeting held on May 9, 1979. This development was reported by several newspapers, including ''

Ettelaat ''Ettela'at'' () is a Persian-language daily newspaper of record published in Tehran, Iran. It is among the oldest publications in the country, and the oldest running Persian daily newspaper in the world. The paper has a conservative stance, a ...

'' (issue no. 15850, dated May 10, 1979).

Name-change from Bank to Organization

At this time, the provisional government declared the banks national. Ruhollah Khomeini excluded the Islamic Bank from the

interim government of Iran The Interim Government of Iran () was the first government established in Iran after the Iranian Revolution. The regime was headed by Mehdi Bazargan, one of the members of the Freedom Movement of Iran, and formed on the order of Ayatollah Kh ...

resolution and said, "The Islamic Bank will not be nationalized." The provisional government agreed that the Islamic Bank of Iran would continue its activities with the statute approved by the Council of Money and Credit and the determined purpose and subject, even with a chosen logo, but would not use the word 'bank', meaning that it would carry out all banking and credit operations by removing the name of the bank, and promised that as soon as the prohibitions were lifted, the Islamic Bank of Iran would operate under the same name. Based on the considerations and promises, only the word "bank" was changed to the phrase "Economics Organization". In other words, the bank continued to exist in terms of substance, but in terms of form, it masked the Islamic Economics Organization of Iran, in other words, the Islamic Bank of Iran is a bank in the form of the Islamic Economic Organization.

3000 trillion rial controversy

In 2015, a representative of

Islamic Consultative Assembly The Islamic Consultative Assembly (), also called the Iranian Parliament, the Iranian Majles (Arabicised spelling Majlis) or ICA, is the unicameral national legislative body of Iran. The parliament currently consists of 290 representatives, an i ...

said that the Islamic Economic Organization illegally withdrew three thousand trillion

rials Rial, riyal, or RIAL may refer to: * Rial (surname), a surname (and list of people with the name) * Royal Institution for the Advancement of Learning, McGill University * Rial Racing, a former German Formula One team Currency Various currencies ...

from the resources of the Qard-ol-Hasanah funds and used it to construct a building for the organization.

References

{{DEFAULTSORT:Islamic Economics Organization of Iran Islamic economics Islamic economic jurisprudence Islamic banking Islamic banks by country Economy of Iran Finance