Article 1
Objectives of the banking system:
(1) the establishment of a monetary and credit system based on rightness and justice (as delineated by the Islamic canon) for the purpose of regulating the sound circulation of money and credit to enhance the health and growth of the economy
(2) using monetary and credit mechanisms, to engage in activities conductive to the attainment of the economic goals, policies and plans of the government of the Islamic Republic
(3) creation of necessary facilities for the extension of cooperation and interest-free lending (gharz-al-hassaneh) among the public through the attraction and absorption of surplus funds, reserves, savings and deposits, and the mobilization thereof, to provide the conditions and opportunities for employment and investment, as stipulated in Article 43 (2 & 9) of the Constitution
(4) maintenance of the currency value and equilibrium in the balance of payments, and facilitating the commercial exchanges
(5) facilitating payments and receipts, exchanges, transactions and other services to be performed by the banks, as determined by law.

Article 2
Functions of the banking system:
(1) issuing of notes and coins as legal tender in conformity with the law and regulations
(2) regulating, controlling and guiding the circulation of money and credit, in accordance with the law and regulations
(3) performing all banking operations in foreign exchange and local currency, and undertaking or guaranteeing the foreign exchange payments of the government, according to the law and regulations
(4) Supervision of transactions in gold and foreign exchange and the inflow or outflow of Iranian currency and foreign exchange, and framing the regulations governing thereof, in accordance with the law
(5) performing operations related to securities according to the law and regulations
(6) carrying out the monetary and credit policies, in accordance with the law and regulations
(7) banking operations related to securities according to the law and regulations
(8) opening of various interest-free (current and savings) accounts and accepting term investment deposits, and issuing the relevant certificates, as required by the law and regulations
(9) granting of interest-free loans and credits, in accordance with the law and regulations
(10) granting of loans and credits and provisions of other banking services to the legally established cooperatives, for the realization of the provisions of Article 43 (2) of the Constitution
(11) conducting transactions in gold and silver and holdings, and management of foreign exchange and gold reserves, with due observance of the relevant law and regulations
(12) holding the Rial balances of international monetary and financial institutions or similar organizations and/or their affiliates, according to the law and regulations
(13) entering into payments arrangement in order to effect monetary trade and transit agreements concluded between the government and other countries in accordance with the law and regulations
(14) accepting and holding in trust of gold, silver, valuables, securities and official documents for natural persons or legal entities and leasing of safe-deposit boxes
(15) issuance, confirmation and acceptance of Rial or foreign exchange guarantees for customers
(16) performance of attorney-ship or guardian-ship services, in accordance with the law and regulations.

Article 3
Banks are authorized to accept deposits under each of the following titles:
(A) Interest-free (gharz al-hasaneh) deposits
1. Current
2. Saving
(B) Term investment deposits
Note: Term investment deposits, for the utilization of which the bank enjoys the power of attorney, shall be used in joint venture (mozarebeh), hire-purchase, installment transaction (mozara'ah, musaqat), direct investment, forward dealings (salaf) and jo'alah transactions

Article 4
Banks are obliged to repay the principals of interest-free (saving and current) deposit, and may undertake and/or insure the principals of the term investment deposits.

Article 5
Based on signed agreement, proceeds derived from activities stipulated in the Note to Article 3 of this Law shall be apportioned in proportion to the term and the amounts of investment deposits and the bank's resources as a proportion to the aggregate resources used in such activities.

Article 6
In order to attract and mobilize deposits, the banks may, through promotional methods, give the following awards to the depositors:
(A) non-fixed bonuses in cash or in kind to interest-free deposits
(B) exempting the depositors from, or granting discount thereto, in payment of commissions and/or fees
(C) according priority in the use of banking facilities to depositors as specified in Chapter III

Article 7
In order to bring about necessary conditions for the expansion of the activities of various production, trade and service sectors, banks may, on basis of partnership, provide a portion of the capital and/or resources required by these sectors.

Article 8
The banks may directly invest in productive and development projects or activities. Plans for such investments should be included in the annual Budget to be approved by the Islamic Consultative Assembly (Majlis), and evaluation of the project should not be indicative of losses.
Note: Banks are by no means entitled to invest in the production of luxury and non- essential consumer goods.

Article 9
In order to provide facilities required for the expansion of commercial activities, banks may, within the framework of the trade policies of the government, put the necessary financial resources at the disposal of the customers on the basis of mozarebeh, assigning priority to the legally established cooperatives.
Note: The banks shall not enter into mozarebeh with the private sector for imports.

Article 10
For the purpose of providing facilities necessary for the expansion of housing activities, banks may, in coordination with the Ministry of Housing and Urban Development, construct low-priced residential units for sale on installment or hire- purchase.
Note: The banks are authorized to acquire for the construction of low-priced residential units subject of Article 10, provided that they duly observe the Urban Lands Act.

Article 11
In order to create the conditions necessary for the expansion of industrial, mining, agricultural and service activities, banks are empowered to purchase movable property, and to sell it on installment to the client, on second basis, upon the request of the client and his undertaking for the purchase, consumption and/or direct use of goods or commodities thus requested.

Article 12
In order to create the necessary facilities of the expansion of service, agricultural, industrial and mining activities, banks may purchase movable and unmovable properties, at the request of the client and his undertaking to hire-purchase the same for his own use, and place them at the disposal of the client in accordance with hire- purchase arrangements.

Article 13
In order to create the conditions required for the provision of working capital needed by productive units, banks may purchase (A) upon the request of the productive units and their undertaking for the purchase and utilization of the primary materials and the spar parts thus requested, primary materials and spare parts needed by productive units and resell them to the said units on credit, and (B) upon the request of the productive units, on

a forward basis, the easy-to-sell products of the said units.

Article 14
For the realization of the objectives expressed by Article 43 (2& 9) of the Constitution, banks are obliged to earmark a portion of their resources, as interest-free loan, to the applicants. The rules of procedure of this Article shall be drawn up by the Central Bank and approved by the Cabinet.

Article 15 (amended on 19 March 1987):
All the contracts exchanged for the execution of this Act shall be, by virtue of an agreement signed by the two parties, regarded as official documents and binding, provided that the two parties do not dispute their provisions. They shall be governed by the provisions of the rules of procedure for official documents. The transactions of immovable and movable properties which are required, by the relevant laws and regulations, to be conducted by notaries public, shall still be performed in accordance with the formalities concerned.
Note 1: Should more than one contract for the awarding of banking facilities be included between a bank and its client through a notary public, the pertaining charges, such as duties, notarization fee and the like, shall be calculated and collected in relation to the first document. In the case of subsequent contracts, the levying of the said shall depend on the increase of the price stated, over the price stated in the preceding contract, In that case, the applicable charges of any type such as duties, notarization fee and the like, with the exception of the writing fee, shall be calculated and collected with respect to the difference of the two prices. The bank's opinion shall determine the relation ship between the contracts.
Note 2: In the instances whereby motor vehicles (either manufactured domestically or imported) are transferred through the banks to persons as a result of awarding banking facilities, the transferring bank shall be regarded as the first-hand transferor, as far as the transfer taxation regulations are concerned.

Article 16
In order to provide the necessary conditions for the expansion of production, trading and service activities, banks may engage in Jo alah

Article 17
Banks may assign on mozara'ah musaqat agricultural lands and/or orchards which are at their disposal or in their possession.

Article 18
Central Bank of Islamic Republic of Iran (CBIRI) shall conduct only those operations sanctioned by this law with respect to the state corporations, not all shares of which are owned by the government.

Article 19
Policy for the credit and short-term (one-year) facilities shall be adopted upon recommendation by the General Assembly of the Central Bank and approval by the cabinet. Policy for credit and five-year and long-term facilities shall be incorporated in the five-year and long-term facilities shall be incorporated in the five-year and long-term development plans bills, and submitted to the Islamic Consultative Assembly for ratification.

Article 20
For the proper functioning of the monetary and credit system, the CBIRI, under rules to be approved by the cabinet, is empowered on the strength of Article 19, to intervene in, and supervise, the monetary and banking activities through the following means:
(A) fixing a minimum and/or maximum ratio of profit for banks in their joint venture and mozarebeh activities; these ratios may vary for different fields of activity
(B) designated of various fields for investment and partnership within the framework of the approved economic policies, and the fixing of a minimum prospective rate of profit for the various investment and partnership projects; the minimum prospective rate of profit may vary with respect to different branches of activity.
(C) fixing a minimum and maximum margin of profit for banks in installment and hire-purchase transactions, as a proportion to the cost price of the goods transacted
(D) determination of types and the minimum and maximum amounts of commissions for banking services (provided that they do not exceed the expense of service rendered) and the fees charged for putting to use the deposits received by the banks
(E) determination of the types, amounts, minimum and maximum bonuses subject of Article 6, and the establishment of guidelines for advertisement by banks in the cases referred to.
(F) determination of the minimum and maximum ratio in joint venture, mozarebeh, investment, hire-purchase, installment transactions, buying or selling on credit forward deals, mozara'h, musaqat, jo'alah and interest-free loans for bank, or any of them, with respect to various fields of activity; also fixing the maximum facility that can by granted to each client.

Article 21
In its dealing with other banks, the CBIRI is not authorized to engage in banking operations which involve usury; nor are the banks among themselves.

Article 22
Upon authorization by the CBIRI, banks may engage in authorized banking operations with state-owned institutions, government-affiliated organizations and public corporations.

Article 23
The funds received as commissions charges and attorney-ship fees shall constitute the bank's income and con not be divided among the depositors.

Article 24
Exemption from commercial benefit tax, and/or tax exemptions granted by law to factories and productive enterprises shall also apply to banks when replacing them in matters of imports or ownership.

Article 25
Consequent to the ratification of this Act, all contravening laws and regulations shall be superseded, and all the powers and duties stipulated in the Monetary and Banking Act the Bill for the Administration of the Banks and the amendments thereto, which have been delegated to other authorized entities under the present Act, shall be divested from the previous authorities.

Articles 27
With the recommendations by the CBIRI, the Ministry of Economic Affairs and Finance shall draw up the rules of procedure of this Act and put them into effect upon their approval by the cabinet. The drafting and approval of the rules of procedure shall not exceed a four-month period. This Act, in 27 Articles and four Notes, was approved by Majlis in its sitting of Tuesday, 30 August 1983 and ratified by the Guardian Council on 1 September 1983.