Consolidation of Commercial Papers in Iranian Law Based on Imam Khomeini's Approach

Today, with respect to the eye-catching developments in economic fields, consolidation of commercial papers to guarantee loans and financial aids has found a unique status in international arena. This has been legally recognized in the majority of world legislative bodies. In Iranian law, however, consolidation of commercial papers faces serious problems because it is chiefly considered as a contract of mortgage. This is because Article 774 of the Civil Law and the orders by the renowned Imamiyah jurists have openly announced mortgage of debt and the benefit as null and void. However, in order to facilitate granting of loans and boosting financial resources and credit transactions, and also in line with promoting efficiency of the banks, some directives and regulations on banking affairs have neglected traditional regulations despite requirements of the civil law and have officially recognized mortgage of instances of nonmaterial properties such as claims, that lack the regulations stipulated in the civil law.