Description

Since the 1979 Islamic Revolution, Iran has implemented Sharia-compliant banking and finance which makes it one of the few countries that has adopted Islamic banking. The post-war liberalization and privatization of the economy and subsequent deregulation had paved the ground for emergence of private banks and financial institutions which had been subject to strict government control and ownership of banks. Further reform of the banking sector included authorization for the establishment and operations of foreign-owned banks in Iran and ratification of international treaties for the reciprocal protection and promotion of capital investments. The most recent government reform plan concerning adoption of a comprehensive banking law aims to create a single regulator for the prudential regulation and supervision of banks and financial institutions. The implementation of the aforesaid banking reform will be instrumental for achieving a sound and safe banking system and restoring investor confidence in the Iranian banking and money markets.