Open AccessDebt-sale securities as a monetary policy instrument in the Islamic banking system of Iran
Author(s) -
Hossein Meisamy
Publication year - 2021
Publication title -
the journal of muamalat and islamic finance research
Language(s) - English
Resource type - Journals
eISSN - 0126-5954
pISSN - 1823-075X
DOI - 10.33102/jmifr.v18i1.325
Subject(s) - debt , financial system , islam , business , government (linguistics) , legitimacy , monetary system , accounting , monetary policy , government debt , economics , finance , monetary economics , law , political science , philosophy , linguistics , theology , politics
This paper discusses the legitimacy of securitizing the central bank receivables from the government and banking system in the Iranian financial market and making use of this instrument to conduct monetary policy. Ijtihad or independent jurisprudential reasoning based on Imamiah Fiqh (prevailing in the Iranian Islamic banking system), is used as paper methodology. The results show that considering the jurisprudential ‘ownership unity’ between the central bank, the government, and governmental banks in the Iranian banking system, securitizing the central bank receivables from the government or the governmental banks is not legitimate and not Shariah-compliant. Nevertheless, it is possible to issue debt-sale securities based on the debts of private banks to the central bank. Therefore, issuing debt-sale securities based on central bank receivables from the private banks can be considered a suitable instrument for conducting Shariah-compliant monetary policy in the Islamic banking system of Iran. This paper discusses for the first time the idea of issuing debt-sale securities as a monetary policy instrument in the Iranian financial system. Besides, the analysis is based on the Imamiah School of Fiqh, which is also new.