The Role of Islamic State in Determination of the Bank Deposit and Loan Interest Rates

Document Type: Conceptual Paper

Authors

1 Department of Management, Tabaran Institute of Higher Education, Mashhad, Iran

2 M.A in Translation Studies, Ferdowsi University of Mashhad, Mashhad, Iran

Abstract

One of the main issues in monetary and banking section is determining the deposit and loan interest rates. In today world, determining the deposit and loan interest rates and their notifications has a great significance for a financial system; it can also have many juridical, legal and economic effects. So, any change in this important issue can question the economic stabilization of our country. But the question here is that who should specify the deposit and loan interest rates? Is this the duty of the Islamic governor or there is no need to his intervention, and the market itself can reach the equilibrium price based on the principle of freedom?  To answer this question, we need to investigate it from the Islamic jurisprudence viewpoint; then after proving that determining the deposit and loan interest rates is a kind of pricing, the results of inspecting the issue of pricing can be used for deposit and loan interest rates determination. This article, firstly, explains the Islamic jurisconsults' views on pricing, then it introduces deposit and loan interest rates determination as kinds of pricing, and uses the results of inspecting the issue of pricing which can be used for deposit and loan interest rates determination.

Keywords

References

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International Journal of Management, Accounting and Economics

Volume 1, Issue 5
December 2014
Pages 389-401

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