Necessity or Unnecessity of adhering to Capital Adequacy Requirements in Free Riba Banking; the Rival Views

The banking system is one of the most important pillars of an economic system So that its correct performance has a great effect on economic growth and development. On the other hand, risk management is one of the most important issues in proper performing of the banking system.
In managing a commercial bank, the proper management of banking risks is very important and problematic because in case of failure, it could disrupt the function of banking system. So, the commitment to the ratio of capital adequacy is vital for the health and prosperity of the system.
In this research, based on the analytical-descriptive method, at first the theoretical foundations of the ratio of capital adequacy and other related issues are explained. Then, it is discussed that whether adhering to Capital Adequacy Requirements in Free Riba Banking is necessary or not.
The research findings indicate that there are two opposing views on importance and necessity of adherence to the conventional capital adequacy requirements. According to the first view point, capital adequacy requirements are inappropriate and non-optimal for Free Riba Banking system but the second view point emphasizes on the requirements, of course, with some changes in accordance with Free Riba Banking.