Evaluating the Degree of Success in Applying Islamic Banking in Iran Using Dynamic Stochastic Optimization Method

In this paper, by constructing and solving an optimization model for Islamic and conventional banking systems, we try to use the stochastic dynamic optimization method, as a new approach, to evaluate the degree of compliance of Iranian banking system with the ideal model of Islamic banking. Thus, we have used the monthly data of an Iranian bank over the years 2006 to 2011 in order to extract the necessary parameters in the model. Based on the simulation results, we have found that although the selected bank operates in accordance with the Islamic contracts in the framework of interest-free banking law, its performance is far from optimal paths proposed by Islamic banking model and almost near to the conventional banking proposed paths. It seems that its reason is the banking system's paying no attention to the role of bank as the depositor's agent and the transferor of all real profits and losses to them.