Formation of concepts about legal status of credit organizations as participants of civil legal relations in the Islamic Republic of Iran

Abstract

The legal status of credit organizations in civil legal relations in the Islamic Republic of Iran is analyzed in the article. The peculiarities of universal companies (shirkat), credit organizations in Islam are also indicated. The reliance on Islamic principles forced the Iranian banks to choose a special path of development. First, the strict prohibition to use the interest rate in the traditional sense. Instead, banks were forced to take part in the projects of their borrowers, sharing with them not only the profits, but also the risks. As a result, Iran's financial institutions largely lost interest in developing the credit sector and were unprotected against systemic
economic fluctuations. State control, practical lack of competition and closeness to the outside world led to the stagnation of the Iranian banking system and the weakening of its role in the development of the economy of the Islamic State of Iran. The development of the economy of the Islamic Republic of Iran is possible in the case of creating the necessary conditions for privatization in the economic and banking sphere and the implementation of Article 44 of the Constitution on privatization. The positive aspects of banking system reform about Islamization of banking carried out in Iran are considered by author. The author formulates characteristics of the models of Islamic banks in the Islamic Republic of Iran during the modern period in the
conclusion of the work.