A Prelude to Designing a Usury Indicator for Islamic Banking

Nowadays, evaluating the performance or performance management of financial enterprises and institutions has special significance. Innovation of new methods for evaluating the performance of financial and credit institutions supports this claim. Through the process of evaluating performance, we can obtain useful information on how to effectively run the affairs for the sake of achieving the established goals. The study of the models of evaluating performance and the inquiries carried out in this field shows that no serious efforts have been made to explore "the evaluation indicator of Islamic banking system operation". Therefore, the present paper, trying to answer this basic question through a descriptive method and content analysis, introduces the "usury indicator" as a first step towards providing a "comprehensive indicator of Islamic banking". The main idea proposed by this paper is that one of the ways of measuring the existence of usury in banking system is to notice the cases of usury devices in bank contracts. To this end, a table which shows the deviance rate of bank contracts which are usury-based has been suggested, and two ratios, i.e, "the ratio of the value of usury contracts" and " the ratio of usury interest" have been proposed in order to provide a new approach to formulate a usury indicator used in Islamic banking.