The bank PARTICIPATION contracts whereof the bank and customer would participate to invest and share the benefits are among the most important bank contracts. In spite of the tit-for-tat transactions, in PARTICIPATION contracts the rate of bank charges is not determined by Central Bank and only the minimum expectable bank charges’ rate would be approved and announced annually, therefore the banks would prefer to utilize the frame of PARTICIPATION contract for providing FACILITIES in order to maximize their benefit via more rate of bank charges. Notwithstanding the accuracy of these utilization by bank system, unfortunately in case of nonpayment of installments of the FACILITIES that have already been given to the customers, the banks would take action to furnish the debited customer with the new FACILITIES whose bank share includes accumulation of the primary facility, bank charges and the damages for delays of nonpayment of installments of that primary facility, instead of extension of repayment period of debited customer and then immediately the banks would settle primary FACILITIES with this new facility mechanism. Different interpretations have been raised regarding accuracy of this type of PARTICIPATION contract in court hearings, and we will conclude ultimately, with due consideration of judicial approaches and court’ s decisions, that the interpretation would be more acceptable which provides for non-accuracy of such contract due to non-formation and believes that banks should be entitled for receipt of its outstanding as per primary facility.

This paper examines the effect of the structure of banking FACILITIES on bank profits in Iran by using panel data during the period (2005-2014). For this purpose, two variables including macro variables and interabang variables have been used. In order to achieve this purpose, among the private banks 9 banks were selected, which provide their retail FACILITIES in the form of Islamic contracts. Since the installment sales and civic PARTICIPATION were respectively 33. 40% and 34. 10%, the most share of the total FACILITIES were allocated in these form. Therefore, in order to examine the profitability of the banks, the above variables were considered as representative of the facility sector. Also, the profitability criteria used include return on equity, return on assets and net profit margin. The results of the research show that there is a positive, negative and significant relationship between civic PARTICIPATION and installment sales with profitability criteria respectively.

Essence of interest is different between Islamic and conventional monetary systems. This difference as well as prohibition of Riba require an alternate monetary policy tool as substitute. PARTICIPATION rate in Profit-Loss Sharing (PLS) contracts is one of such substitutes. This paper aims to investigate the PARTICIPATION rate as a monetary policy tool and also identifying its restrictions and capabilities within a theoretical framework. For this purpose, extracting demand and supply functions of PLS funds, we developed a theoretical model for PLS funds market. The results show that the PLS funds market may collapse under certain conditions. The more opportunity cost of supply of PLS funds is, the more probability of dis-equilibrium and collapse is. This paper introduces a threshold level of expected return that suppliers are not willing to supply their funds for less than that amount. This expected return is a function of expectation of suppliers from return of the project in boom and recession, PARTICIPATION rate and probability of boom. Under this condition, it is obvious that PARTICIPATION rate is no longer efficient as a monetary policy tool in order to influence on employment and aggregate output through investment channel and a new one has to be found. Furthermore, the results indicate that the PARTICIPATION rate has an opposite impact on both expected inflation and inflation and if considered as an endogenous variable, it shows a stationary behavior which leads Islamic financial system to be more stable. The monetary policy maker should be aware that PARTICIPATION rate is not always efficient and its efficiency depends on variables and parameters like rate of return in boom and recession, PARTICIPATION rate and expected return.

Background and Aim: One of the methods of banks to reduce outstanding claims is to grant new FACILITIES, which of course has always been a subject of discussion. The purpose of this article is to examine the legal status of contracts for granting new bank FACILITIES in order to settle previous FACILITIES. Method: The present paper is descriptive and analytical using the library method. Ethical Considerations: In all stages of writing the present study, the originality of the texts, honesty and trustworthiness have been respected. Results: In order to settle the previous FACILITIES, banks conclude new partnership agreements with the borrower with the aim of settling the previous FACILITIES. At the end of the contract, the borrower does not have the ability to settle the loan. The bank or credit institution will charge interest and late payment penalty and draw up a new contract under the title of civil partnership and settle the old loan amount. Civil partnership contracts are known as one of the most widely used banking contracts, which the bank concludes to grant FACILITIES to individuals. In fact, according to many experts, Islamic banking is that people share in profits and losses proportionally by concluding a partnership contract. In such FACILITIES, the share of the partnership in the partnership contract is usually not deposited into the account of the civil partnership account, and this amount is taken to clear the debts of the debtors. Conclusion: Contracts for granting new bank FACILITIES in order to settle the previous FACILITIES are correct if they should not be formal and due to reasons of force majeure and in fact, they are illegal, while this is not the case.