Following the Iranian Revolution, Iran's banking system was transformed to be run on an Islamic interest-free basis.
They totaled 17,344 trillion rials, or US$523 billion at the free market exchange rate, using central bank data, according to Reuters.
Extensive regulations are in place, including controls on rates of return and subsidized credit for specific regions.
Trading takes place through licensed private brokers registered with the Securities and Exchange Organization of Iran.
The “Hedging Master Agreement” provides a structure under which institutions can trade derivatives such as profit-rate and currency swaps.
[12][14] While the standards of the Bahrain-based Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) are widely followed around the world, they are not enforced in Iran.
IMF estimates public debt could be as high as 40% of GDP once government arrears to the private sector are recognized.
[9] Regarding corruption and cronyism in the banking sector, Tehran Prosecutor General Abbas Jafari Dowlatabadi said in 2016:[30] "Banking has been a safe haven in all such cases for corruption to incubate, with high-ranking management turning a blind eye on the corruption underway in inner organizational levels and or actively participating to gain their illicit interests [..] 11 banks had paid a sum of $2.5bn, with 1287 individuals filing for insolvency; the deadlock to be solved requires three fundamental approaches; the first remains with banks to adapt stricter roles and criteria for granting loans; the bank directors should be in the frontline of the fight for corruption; no run of-the-mill entrepreneur should receive inordinate amounts without putting in stake enough guarantees; cronyism should be abolished and unqualified evidence should not be lent credence as individual’s credentials as receiving loans.
"In FY 2004 the balance sheet of the banking system showed that total assets and liabilities were US$165 billion, an increase of 226 percent since 1976.
As of September 2014, Assets: The banks and financial institutions, total claims on the public sector (government and governmental institutions) amounted to 929 trillion IRR ($34.8 billion), and total claims on the non-public sector amounted to 5412 trillion IRR ($203 billion).
[41] In 2010, 5.5% of the Mobile Telecommunication Company of Iran shares were offered on the Iranian Over-The-Counter (OTC) market, at a value of $396 million.
[53] Iran will also issue $15 billion in sukuk (Islamic Sharia-based) bonds in 2012 to be invested in the domestic oil industry.
[72] In recent decades Iran has shown an increasing interest in various entrepreneurship fields, in higher educational settings, policy making and business.
Iran's fifth economic plan (2010–15) has allotted $3 billion to the Initial Investment Technology Fund, which is designed to support new university graduates who want to develop their ideas and carry out innovative projects.
[80] The Innovation and Prosperity Fund was also established in March 2011 to support knowledge base companies & foreign direct investment in Iran.
Article 44 (fifth clause) of the Iranian Constitution Law had heretofore placed banking activities exclusively in the hands of government.
[citation needed] A handful of foreign bank branches and representative offices extant in the country were allowed to undertake administrative and coordination activities but were not permitted to open customer accounts inside the territory of mainland Iran, receive deposits or extend normative facilities.
[citation needed] According to the new rules, only the Iranian government has the authority to form joint banks with foreign entities.
[citation needed] In 2009, four US banks, including Citibank and Goldman Sachs applied for opening a branch in Iran.
If the Majlis and CBI approve their request, these four banks will set up a temporary branch in an Iranian free trade zone.
that the banks filing the requests for working in Iran were from "states in the Persian Gulf and the Middle East regions as well as Asia".
Iran's Majlis (parliament) has ratified the bill for the establishment of domestic-foreign joint banks and insurance companies in free trade zones.
[3] In 2006, Swiss banks UBS and Credit Suisse as well as ABN AMRO and HSBC - decided to end their operations in Iran.
UBS announced that it had stopped doing business with Iran because of the company's economic and risk analysis of the situation in the country.
Insurance companies Asia, Dana and Alborz will be listed on the stock exchange in 2009 after review and improvement in their financial accounts, internal regulations and organizational structure nationwide.
[98] One of the defining characteristics of the economy is entrenched high inflation (and expectations) thanks to persistent monetisation of fiscal deficits.
According to Business Monitor International, unless and until economic policies in Iran change radically, the reality of the insurance sector will fall a long way short of its potential.
Many large reinsurance companies are also considering returning to Iran (including Lloyd's, Allianz, Zurich Insurance, Hannover Re and RSA).
"[110] In February 2019, Ayatollah Nasir Makarem Sherazi said: "Banks have created conditions that have made people's lives miserable.
"[111] In September 2018, Ayatollah Noori Hamdani said: "It has been said many times that the money that our banks charge in the name of fines on the loans is interest and is impermissible.