Document Type : Article


1 Ph.D in Public Law, Faculty of Law , Theology, and Political Science, Science And Reserach branch,Islamic Azad University, Tehran, Iran

2 Visiting Professor of Public and International Law Faculty of Law, Theology and Political Sciences, Science and Research Branch, Islamic Azad University, Tehran, Iran; Associate Prof Department of Public and international Law, Faculty of Law and Political Science,Allameh Tabatabai University,Tehran, Iran

3 Prof., Department of Public Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran.



Credit institutions are one of the most important actors in the money market that have developed their activities in the legal frameworks. However, many unauthorized credit institutions are also involved in depository activities and have expanded significantly in recent years. The main legal reasons for the disorderly state of the credit institutions are the ambiguity in the [Iranian] Central Bank’s authority to monitor credit institutions, challenges in enforcing the 2004 Act on Regulating the Unorganized Monetary Market, and the Acts relating to fifth and sixth Five-Year Development Plans. This situation has resulted in various problems such as deviations from monetary and banking policies of the state, as well as non-compliance with expansionary and/or contractionary monetary policies. In addition, the Central Bank is responsible for the deposit insurance of the credit-institutions clients, therefore these institutions can cause bigger crisis in the long term. This article seeks to examine the legal reasons behind the emergence of unauthorized credit institutions and the resulting challenges of leaving them unregulated. It also aims to provide some solutions to tackle these challenges.


  1. English

    1. A) Books
    2. Rochet, Jean- Charles (2007), Why Are There So Many Banking Crises?, Princeton University Press.
    3. Singh, Dalvinder (2007), Banking Regulation of UK and US Financial Markets, Ashgate Publishing Compani.


    1. B) Articls
    2. Barth, James R, Jr & Gerard Caprio, Levine, Ross (2002), “Bank Regulation And Supervison: What Works Best?” , National Bureau Of Economic Reaserach.
    3. Namazi, Mohammad & Salehi, Mahdi (2010), “The Role of Inflation in Financial Repression: Evidence from Iran”, World Applied Sciences Journal 11 (6).


    References in Persian:

    1. A) Books
    2. Asdipour, Noushin (2019), Supervision of banks and implementation methods, Research Institute of Money and Banking (In Persian).
    3. Elsan, Mustafa (2016), Banking law, 5th edition, Samt Publications (In Persian).
    4. Constable, Mohammad Reza (2014), Laws of commercial companies, 9th edition, Samt Publications (In Persian).
    5. Rashidi, Mehdi (2012), International Banking (1), 9th edition, Banking Higher Education Institute, Iran (In Persian).
    6. Soltani, Mohammad (2010), Banking Law, Mizan Publications, first edition (In Persian).
    7. Mishkin, Frederick, Eakins, Stanley (2011), Markets and Financial Institutions, translated by Dr. Hamid Kordbecheh, published by the Research Institute of Money and Banking, first edition, Vol.2 (In Persian).
    8. Hadi Far, Daoud (2009), Regulatory legal entities; Structure and mechanism of executive work, Tehran: Etrat No Publishing, first edition (In Persian).


    1. B) Articles
    2. Esfandiari, Marzieh (2016), "The country's banking network is in danger of Ponzi trap", bi-monthly news of the economy, No. 149 (In Persian).
    3. Bashiri, Sahar, Aziznejad, Samad (2016), "Evaluation of the Central Bank's performance in connection with the organization of unsecured credit institutions", serial number: 15734 (In Persian).
    4. Pashaei, Hossein & Motamedi, Javad (2018), "Reforming judicial processes in the light of the strategy to resolve the conflict of interest situation", Journal of Private Law, No. 1, Vol. 16 (In Persian).
    5. Tejali, Seyyed Ayatollah (2010), The effects of lowering the bank interest rate on inflation, employment and investment, Tehran, Islamic Council Research Center, No. 9 (In Persian).
    6. Heydari, Hassan & Heydari, Narges (2015), "Reviewing the performance of the monetary and credit policy maker in Iran", serial number: 14792.
    7. Dastgir, Ali Akbar & Jafarzadeh, Roya (2009), "Organizational Structure of Banking Supervision", New Economy, Year 7, No. 125 (In Persian).
    8. Rahiminejad, Ismail (2016), Pathology of the banking system (Analysis and investigation of the unstructured monetary market, first edition), serial number: 15141 (In Persian).
    9. Rouhani, Sayyed Ali & Parhishkari, Sayyed Abbas (2015), Effective supervision of banks and the question of the authority of the supervisor, serial number: 15187 (In Persian).
    10. Salarkia, Amir Abbas (2015), "Unauthorized financial institutions, the settlement process and the future", bi-monthly "News of Economy", Monetary and Banking Research Institute of the Central Bank of the Islamic Republic of Iran, No. 149 (In Persian).
    11. Elsan, Mustafa (2011), "Comparative study of the legal authority of the regulatory body in banking", Money and Economy Quarterly, No. 9 (In Persian).
    12. Habibzadeh, Mohammad Jafar ,Saber, Mahmoud & Samii Zenouz, Hossein; (2015), "Analysis of the risk of persistence in unauthorized employment in banking operations", Monetary and Banking Research Quarterly, ninth year, No. 28 (In Persian).
    13. Samii Zenouz, Hossein & Habibzadeh, Mohammad Jafar, Mahmoud (2017), "Criminal Liability of Credit Institutions in Iranian Law", Judicial Law Journal, No. 100 (In Persian).

    20- Akbar (2009) "Optimum Bank Interest Rate to Maximize Economic Growth in Iran", Program and Budget Quarterly, Year 14, No. 108 (In Persian).

    1. Gurji, Ali Akbar & Mirtrabi, Hedi Sadat (2014), "Challenges of banking regulation in the context of Iran's legal system", Banking Law Journal, No. 7 (In Persian).
    2. Mobasr, Dariush & Hakim Shoushtari, Nahid (2001), Expert report on the unorganized money market regulation bill, Research Center of the Islamic Council (In Persian).
    3. Mollakrimi, Nemat Elah & Zarei, Ehsan Elah (2012), "Investigation of the status of credit cooperatives in the world and a review of how to organize and supervise trade and independent credit cooperatives in Iran", Ravand Magazine, No. 62 and 61 (In Persian).
    4. Mousaviyan, Seyyed Abbas (2008), "Jurisprudential examination of bank interest rate determination", Islamic Law Journal, 14th year, No. 16 (In Persian).


    1. C) Laws and regulations
    2. Monetary and Banking Law of The Country approved in 1972 (In Persian).
    3. Law on Regulation of Unorganized Money Market approved in 2013 (In Persian).
    4. Anti-Money Laundering Law approved in 2016 (In Persian).
    5. The Law on Punishing Disruptors in the Economic System of the Country approved in 1990 (In Persian).
    6. Cooperative Companies Law approved in 1971 (In Persian).
    7. Law on the Cooperative Sector of the Economy of the Islamic Republic of Iran approved in 1991 (In Persian).
    8. Trade Law approved in 1922 and amended in 1968 (In Persian).
    9. The Law on the Implementation of General Policies of Article 44 of the Constitution approved in 2016 (In Persian).
    10. Islamic Penal Code approved in 2012 (In Persian).
    11. Criminal Procedure Law approved in 2012 (In Persian).
    12. The Law of The Fifth Five-Year Development Plan of The Islamic Republic of Iran approved in 2009 (In Persian).
    13. The Law of The Sixth Five-Year Development Plan of The Islamic Republic of Iran approved in 2015 (In Persian).
    14. The Law on Permanent Orders of The Country's Development Programs approved in 2015 (In Persian).
    15. Executive Regulations of the Law on Regulation of Unorganized Money Market approved in 2016 (In Persian).
    16. Executive Regulations, Note 3, Article 1 and Clause C, Note 2, Article 2 of the Law on Regulating the Unorganized Money Market approved in 2016 (In Persian).
    17. Regulations on The Establishment and Administration of Banks and Non-Governmental Financial and Credit Institutions approved in 2018 (In Persian).
    18. Regulations on How to Establish and Manage Non-Governmental Credit Institutions approved in 2013 (In Persian).
    19. Instructions for Verification and Disqualification of Credit Institution Managers approved in 2015 by Central Bank Regulation and Supervision Commission (In Persian).
    20. Regulations on Advertising in The Country's Monetary and Banking Sector, approved by the Council of Ministers on 10/08/2018 (In Persian).