An Investigation on the Possibility of a Rule-based System instead of a Directorial one in Determination of Profit Rate in the Islamic Banking System of Iran

Determining the profit rate in the Iran's economy as an arbitrary order, although justified in some ways, has caused many problems such as the failure to achieve the grand goals of the policymaker, lack of proper decision making in accordance with business cycles, lack of control and management of economic variables, loss of resources inefficiently. Using a descriptive-analytical method this paper suggests a rule-based system for the determination of profit rate. The rule-based system for the determination of profit rate, in addition to solving the above problems, reduces policy mistakes, increases transparency in decision making as well as reducing political interference in the management of society's monetary system. The Taylor rule is known as one of the most famous and popular monetary rules, although in many studies and policies of the Central Bank, conventional economies have been used with positive results, but its use in the Islamic economy requires jurisprudential-economic studies. The results indicate the possibility of the rule-based system for the determination of profit ratein the banking system of the Islamic Republic of Iran inspired by the Taylor rule. In this regard, the profit rate of exchange contracts can be determined according to the variables of the real sector of the economy and monetary policy objectives in such a way that the rate is not derived from the interest rate. This profit rate on barter contracts can also be used as a guide for determining the rate of return on partnership contracts.