Document Type : Resear Paper (Islamic Public Finance)

Author

• Ali Aghajani Khorasgani

Faculty of Industrial and Systems Engineering, Tarbiat Modares University, Tehran, Iran

Abstract

The aim of this article is to introduce a model for deciding how to postpone bank claims within the framework of the executive instructions approved on August 4, 2018 by the Money and Credit Council of the Central Bank of Iran. The most important financial criteria for deciding on the way to resolving non-performing loans and their importance coefficients have been collected using a Likert scale questionnaire from banking experts. The reliability of the data obtained from the questionnaire has been confirmed by Cronbach's alpha test. The decision model consists of three modules. The first module specifies the eligibility of the applicant to the postponement of the bank claim.

The second module examines the profitability of the applicant company using financial criteria such as operating profit margin, sales-to-assets ratio, current debt incurred as part of long-term debt and long-term investment-to-asset ratio. This module helps to identify the postponement method among the methods of redistribution, extension, renewal or conversion of the contract. The third module is served when the result of the second module is the termination of the current contract and the need to convert the new contract. The third module uses financial criteria such as the receivables collection period, the ratio of exports to total sales, the quality and variety of products, orders and prepayments, and the ratio of the finished price to sales to choosing the type of new contract. This model suggests the appropriate contract using information related to financial criteria about the applicant company.

Keywords

• Decision-Making
• Non-Performing Loans
• claims postponement
• Islamic contracts
• Tile and ceramic industry

Main Subjects

• Resear Paper (Islamic Public Finance)