Jurisprudential and Legal Study of Conflict of Interest in Non-Governmental Banks

Document Type : Original Article

Authors

1 PhD student, Department of Private Law, Islamic Azad University, Tehran Branch

2 Assistant Professor, Department of Private Law, College of Law, Theology and Political Science, Tehran science and research branch, Islamic Azad University, Tehran, Iran.

3 Assistant Professor, Department of Private Law, Faculty of Law, Islamic Azad University, Science and Research Branch, Tehran, Iran

4 Assistant Professor, Law Department, Faculty of Law, Islamic Azad University, Tehran, Iran

Abstract

Unlike governmental banks funded and run by the government, non-governmental banks are a subsidiary of public limited companies, thus always experience a conflict of interest. An obvious example of these conflicts may be found in the decisions of managers transacting on behalf of companies whose family members or relatives are there, or who have a worldly enmity or lawsuit with the other party. This will in turn lead the bank manager not to be neutral in this situation. Referring to Islamic and jurisprudential principles is one of the ways to solve these conflicts. Although there is no explicit order in the holy Sharia law regarding the duties of this group of managers, given the lack of a jurisprudential equivalent, this issue may be solved to a large extent by unitizing similar laws like rejecting the judge, prohibiting testimony about enmity, managers’ duties regarding the property of the wards, the advocacy affairs and the explanation of the appropriate regulations, and with the help as well as continuous legal supervision, especially the religious supervision by the jurisprudential council of the Central Bank that is still active but its decisions are not binding and only are advised. Relying on descriptive-analytical method, the present study explains the issue and compares it with similar cases in jurisprudence.

Keywords

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Journal of Studies in Islamic Law & Jurisprudence
Volume 14, Issue 26
March 2022
Pages 359-386

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