IslamicFinance.de

Iran may be about to restore banking links with the rest of the world after years of separation, but the process won't be easy. The Iranian banks' shaky finances and close ties with their government will increase the risks of dealing with them. And during their years of isolation, they have developed a version of Islamic finance that is in some ways markedly different from that practiced in other Muslim-majority states. The differences may make it hard for foreign banks, even ones from other big Islamic banking markets in the Gulf and southeast Asia, to do business in Iran. Major issues are the trading of debt and use of derivatives — these are two very complicated issues in any Islamic financial system, and in Iran we have very different approaches.