Muḥammad-Javād Muḥaqqiqniyā, Ulgū-yi Bānk-dārī-yi Islāmī (The Model of Islamic Banking), 1st ed., 1 vol., Qom: al-Muṣṭafā Publications, 1394 SH (2015 CE), 424 pp.
In an age when financial systems are under scrutiny for ethical accountability and social justice, the rise of Islamic banking as an alternative framework is gaining global traction. Ulgū-yi Bānk-dārī-yi Islāmī (The Model of Islamic Banking) by Muḥammad-Javād Muḥaqqiqniyā provides an essential contribution to this discourse, especially for scholars and practitioners interested in Islamic finance. Designed as a master-level textbook for students of Islamic Finance and Banking, the book systematically analyzes the objectives, structures, and practical models of Islamic banking, contextualizing them within the broader framework of Islamic economic theory.
Published in 1394 SH (2015) by al-Muṣṭafā Publications and spanning 424 pages, this scholarly work bridges the gap between theoretical Islamic jurisprudence and real-world financial implementation. It evaluates not just Iran’s non-usury banking system but also presents models from other Muslim-majority and even non-Muslim countries. The book’s comprehensive scope and analytical rigor make it an indispensable resource for students, academics, and policy-makers alike.
Dr. Muḥammad-Javād Muḥaqqiqniyā is a scholar in the fields of Islamic economics and jurisprudence. His academic journey began in 1365 SH (1986), when he entered the Islamic Seminary, completing his advanced studies in 1373 SH and later attending advance courses on jurisprudence and its principles under esteemed scholars such as Āyatullāhs Tabrīzī, Wahīd Khurāsānī, Shubayrī Zanjānī, Kharrāzī, and Shāhrūdī.
Dr. Muḥaqqiqniyā earned his integrated master’s degree in economics from the Imam Khomeini Institute for Education and Research, with a thesis on “The Economic System Proposed by the Constitution of the Islamic Republic.” He then obtained a PhD in economics from Allamah Tabataba’i University in 1388 SH (2009), with a dissertation on “The Structure of Islamic Banking and a Proposed Model for the Islamic Republic of Iran.” His advisors and reviewers included prominent figures like Dr. Dāwūdī, Ḥujjat al-Islām Dr. Miṣbāḥī Muqaddam, and Dr. Farhād Rahbar.
His professional experience is extensive. He has served on the faculty of various institutions such as the Ministry of Economy’s Economic Research Institute. He has been actively involved in several reform initiatives, including committees for banking transformation and regulatory behavior modification. His teaching spans over two decades across multiple institutions including the Qom Seminary, Shahid Beheshti University, and the Islamic Azad University, covering a wide array of economic disciplines.
The central thesis of Ulgū-yi Bānk-dārī-yi Islāmī is that Islamic banking must be understood as an integral part of the Islamic economic system and, by extension, the broader Islamic worldview. Unlike capitalist banking systems, where profit maximization and interest-based lending are dominant paradigms, Islamic banking, according to Muḥaqqiqniyā, should aim to fulfill the overarching goals of Islamic society, including justice, equitable distribution, and prohibition of ribā (usury).
The book argues for a redefinition of the banking model from one based on dual roles of deposit-taking and lending to one that structurally separates these functions. This concept, referred to as tafkīk, implies segregating demand deposits (used for payment services) from time deposits (used for investment), ensuring that interest-bearing mechanisms are eliminated from both categories. The ultimate aim is to design a banking system that not only avoids ribā but actively contributes to the spiritual and economic welfare of the people.
The book is divided into four major sections:
Section One: Conceptual Foundations
This section outlines the characteristics of Islamic banking and distinguishes it from conventional capitalist systems. It delves into the historical emergence of interest-free banking, the various types of contracts used in Islamic finance, and the practical challenges faced by Islamic banks in Iran. Muḥaqqiqniyā discusses operational problems and identifies core functions of banks within an Islamic economy.
Section Two: Existing Banking Models
Here, the author surveys a range of banking systems—investment banking, developmental banking, commercial banking, limited-purpose banks, universal banks, and microfinance institutions. Each model is examined for its historical roots, domain of operation, advantages, and inherent limitations. This comparative analysis serves as a foundation for proposing models more aligned with Islamic values.
Section Three: Proposed Islamic Banking Models
This is the heart of the book. Muḥaqqiqniyā critically evaluates Iran’s current “interest-free” banking system and proposes several alternative models, including:
- Wikālat Model (Agency-based model) by Shahīd Ṣadr
- Qarḍ al-Ḥasanah Model (Benevolent loan model)
- Akhlāqī Model (Ethical banking model)
- Takhaṣṣuṣī Model (Specialized banking)
- Furūsh-i Khadamāt Model (Service-sale model)
- Tafkīk Model (Functional separation model)
Each model is thoroughly described in terms of resource mobilization, fund allocation, and service provision. Of particular note is the Tafkīk model, which proposes strict separation between commercial and investment functions, advocating for maximum compliance with Sharīʿa and full elimination of ribā.
Section Four: International Models
The final section offers a global perspective, detailing the Islamic banking practices in countries such as the UAE, Syria, Pakistan, Saudi Arabia, Bahrain, Kuwait, and even the UK. It examines various institutions, exploring how these banks structure Islamic-compliant financial products and navigate regulatory landscapes. This comparative dimension enriches the theoretical discourse with practical, real-world implementations.
Ulgū-yi Bānk-dārī-yi Islāmī stands out for its methodological thoroughness and multidimensional analysis. Dr. Muḥaqqiqniyā succeeds in presenting a highly structured, academically rigorous, and ideologically rooted framework for Islamic banking. His integration of jurisprudence, economics, and public policy allows the book to transcend mere theory, addressing the operational and institutional gaps in the current Iranian system.
The book’s strength lies in its systematic comparison of banking models, both within Islamic jurisprudence and in global practice. This dual focus gives it both academic depth and practical relevance. Moreover, the author’s deep familiarity with both sharī‘a and modern economics enables him to propose models that are not only ideologically sound but also potentially feasible.
In conclusion, this book is a great contribution to Islamic banking literature. It not only critiques existing structures but also offers constructive alternatives, rooted in Islamic epistemology and supported by practical insight. As countries across the Muslim world seek to reform their financial systems, Muḥaqqiqniyā’s work will remain a valuable reference for shaping the future of ethical and Islamic finance.
