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Bijan Bidabad Monetary and Banking Research Academy (MBRA) Central Bank of Iran

Economic- Juristic Analysis of Usury in Consumption and Investment Loans and Contemporary Jurisprudence Shortages in Exploring Legislator Commandments. Bijan Bidabad Monetary and Banking Research Academy (MBRA) Central Bank of Iran. Juristic Methodology. Jurisprudence and knowledge Quran

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Bijan Bidabad Monetary and Banking Research Academy (MBRA) Central Bank of Iran

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  1. Economic- Juristic Analysis of Usury in Consumption and Investment Loans andContemporary Jurisprudence Shortages in Exploring Legislator Commandments Bijan Bidabad Monetary and Banking Research Academy (MBRA) Central Bank of Iran

  2. Juristic Methodology • Jurisprudence and knowledge • Quran • Tradition • Consensus • Intellect • Fame • Islamic intellectuals’ way of life • Analogy • Preference • Considering public interest • Blocking the means

  3. Interest-Usury-Profit • Interest • Usury • Exiting usury bound • Consumption and Investment Loans

  4. Usury and Non-usury Loans • The loaner must share in profit and loss of the economic activity of loan receiver. • The rate of interest -because of inability to determine the capital productivity rate a priori- should not be determined and conditioned in advance. • Receiving interest in consumption loans is usury and not allowed.

  5. Two Paradigms • The juristic deduction methodology needs revision. • Ignorance to theosophy principle of jurisprudence is the main source of conflicts.

  6. Saving Market Loan Market Bank’s credit supply Bank’s demand for deposits Investor demand for Loan Saving supply Sources of Oscillations Usury initiates real sector fluctuations Loan Interest rate Deposit Interest rate

  7. Usury oscillation >>Real sector cycle If: Then: ThUS: Then:

  8. Thanks Bijan Bidabad Monetary and Banking Research Academy (MBRA) Central Bank of Iran bijan_bidabad@msn.com

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