Legal analysis on contractual and legislative approach of prohibition of investment and entrepreneurship of banks in Iran

Farivar, Zahra; Simaei Sarraf, Hosein

doi:10.48300/jlr.2025.501382.2853

Legal analysis on contractual and legislative approach of prohibition of investment and entrepreneurship of banks in Iran

Articles in Press

Document Type : Original Article

Authors

Zahra Farivar ¹

Hosein Simaei Sarraf ²

¹ PhD in Private Law, Faculty of Law and Political Science, University of Tehran, Tehran, Iran.

² Associate Professor, Department of Private Law, Faculty of Law, Shahid Beheshti University, Tehran, Iran.

10.48300/jlr.2025.501382.2853

Abstract

Directive of Anti-Usury Code of Bank Activities of Iran ( approved 1362), produce new contract which lead to investment and entrepreneurship of banks in corporations that have non-banking activities. This contract is criticized not only in view of private law, but also in view of public economic law, as it is in contradiction with prohibition of investment and entrepreneurship of banks in commercial banking system. In this article, inefficiency of this contract in private economic law will be analyzed, and then normative purposes of banning investment banking in commercial banks will be examined. This article will review developments in the field of regulation and legislation on prohibition of investment and entrepreneurship of banks, like article 16 Code on Removing Barriers to Competitive Production and Improving the Country's Financial System (approved 1394) and Seventh Development Program Act (approved at 1403) which have several executive solution in isolating this contract, and output of all solutions of Iran’s legal system in this regards will be explained.

Keywords

"Investment and entrepreneurship"

" investment banking"

"commercial banking system"

"prohibition"

"banking contracts"