The Effect of Economic Security on Qardh al-hasan Deposit in Iran's Public and Private Banks

Qardh al-hasan (or benevolent lending known as a form of interest-free loan), is introduced as a good tool to realize the general approach of "prohibition of Riba or usury". Also, the rights and privileges this contract provides to both parties make it attractive both for raising and savin...

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Bibliographic Details
Published in:Justārhā-yi iqtiṣādī (Online) 2019-03, Vol.16 (31), p.91-110
Main Authors: Mahdi Ja'afari, Abolfazl Shahabadi
Format: Article
Language:per
Subjects:
deposit
economic security
qardh al-hasane
Online Access:Get full text
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Summary:Qardh al-hasan (or benevolent lending known as a form of interest-free loan), is introduced as a good tool to realize the general approach of "prohibition of Riba or usury". Also, the rights and privileges this contract provides to both parties make it attractive both for raising and saving funds and for the supplying of the invested funds; but the lender's complete confidence in the future purchasing power of the borrowed money is one of the key factors in people's decision to invest in Qardh al-hasan deposits, which depends on the quality of the economic environment. This paper examines the determinants of Qardh al-hasane deposits with emphasis on economic security in public and private Iranian banks over the period 1984-2016. The results show that economic security has a positive and significant effect on Qardh al-hasane deposits. Also other variables such as volume of liquidity and Qardh al-hasane deposits and savings have positive and significant effect on Qardh al-hasane deposits, while interest rate of bank deposits has negative and significant effect on Qardh al-hasane deposits.
ISSN:1735-3300
2588-5812
DOI:10.30471/iee.2019.1588