Document Type : Science - Research (Islamic Banking)

Authors

• Mohammad Mahdi Fotouhi Rashidi ¹
• Mohammad Nadiri ²
• Alireza Saranj ²
• Mohammad Reza Jalilvand ³

¹ Ph.D. Candidate, Department of Management and Accounting, Farabi Faculty, University of Tehran, Qom, Iran.

² Associate Prof., Department of Management and Accounting, Farabi Faculty, University of Tehran, Qom, Iran.

³ Assistant Prof., Department of Management and Accounting, Farabi Faculty, University of Tehran, Tehran, Iran.

Abstract

The banking system's operations are inherently tied to money creation and credit supply, which directly influence the mechanisms of wealth distribution and redistribution in society. In the absence of ethical and social considerations, these processes, whether intentionally or unintentionally, exacerbate economic imbalances and widen the gap in access to financial services and resources. Consequently, topics such as the social responsibility of banks and monetary authorities toward stakeholders (the general public) and the mitigation of adverse effects of banking operations, such as credit creation at public expense and the inevitable escalation of income inequality, have gained prominence among researchers and policymakers. Scholars in this field aim to thoroughly analyze the detrimental impacts of banking activities on equity and explore effective solutions for reforming and improving current practices. In this context, Iran's banking system, operating under chronic inflation and negative real interest rates, inherently facilitates credit creation and allocation, further amplifying credit rent distribution and intensifying distributive injustices. This study systematically reviews 44 selected articles published between 1990 and 2023 that address distributive justice in conventional banking systems. Through a comparative analysis of the extracted components against Islamic financial principles, higher-order legal frameworks, and Iran's current banking practices, the research synthesizes actionable insights for Iran's banking sector. The findings provide parallel examples from conventional banking systems and offer policy recommendations to enhance and promote distributive justice within Iran’s banking framework, informed by global experiences.

Keywords

• Banking
• Money Creation
• Distributive Justice
• Credit Policies
• Systematic Review

Main Subjects

• Science - Research (Islamic Banking)