Document Type : Original Article

Authors

• Mahmood Akbari ¹
• Seyyed Mahdi Hashemifar ²
• Reza Karimi Vardanjani ³
• Mohammad Reza Simiari ⁴

¹ Assistant Professor of the Department of Law, Ayatollah Boroujerdi University, Boroujerd, Iran

² Master Student of Islamic Education and Financial Management, Imam Sadiq(A.S) University, Tehran, Iran

³ PhD Student in Financial Management, Imam Sadiq(A.S) University, Tehran, Iran

⁴ PhD Student in Financial Management, Shahid Beheshti University, Tehran, Iran

Abstract

Money creation is naturally one of the Effects of the conventional banking system. Is the creation of money by the Islamic banking system legitimate in the Islamic economy? In today's economy, the share of bank money in the whole of the money in circulation is a novel and well-considered subject. Hearing the fact that most of the money is in the creaking economy of the banking system and not the central bank is probably shocking and perhaps unbelievable to the general public. In this study, the nature of money creation is explained first, and its types include money creation by the central bank, commercial banks and the people. Then the consequences and the potential positive and negative economic consequences of it are mentioned. Investigating the creation of money from an Islamic perspective begins with a review of Islamic scholars on the subject, and then it is referred to as the Ghasb and the rules of La’Zarar, akule mal br batel, ehteram male muslim, Etlaf and Eghdam. It seems that the very nature of money creation in the banking system is not Ghasb and seems to be impossibly general rules, although it can have positive effects, such as double-edged razor, and if it is accompanied by inadequate conditions, structure, regulation and supervision. As a result, money creation must be accompanied by sound policymaking, regulation and Supervision. Islamic economics guidelines, including the criteria for »Hagh«, »Ghavam«, »Omran« and »Kanz«, outline the criteria for authorizing money creation.

Keywords

• Bank
• Islamic Banking
• Money Creation
• Bank Deposit
• Islamic Finance