Rastin Banking

Abstract
Purpose: This paper aims to explain the legal infrastructure of Rastin Profit and Loss Sharing (PLS) Banking. Rastin Banking is a full Islamic Banking System with all necessary parts for banking operations that can be installed in conventional and Islamic banks both. In this part of the paper, we are going to explain the milestones of Rastin PLS banking regulative groundwork.
Design: Rastin Banking complies with the nature of financial intermediary activity (partnership of depositor in the yields of the fund receiver via the bank). In order to fulfil this goal, particular formation, organisational structure, instruments and workflow are defined in a legal framework.
Findings: To handle Rastin Banking, the particular theoretical and operational regulatory frameworks and legal context of the contracts should be defined to fulfil the participation operations. In this paper, we will have a look at the necessary legal environment to setup Rastin Banking.
Research limitations: This system is novel, and requires more elaborations for further practical development and adjustment.
Practical implications: In this system, the investment return of the participation is distributed to the parties of financial partnership (depositor, entrepreneur and bank), and it is done by eliminating fixed interest rate, and it is based on the real economy profit (return) of the activity.
Social implications: Rastin Banking can lead to important positive effects on growth and economic welfare through money and capital markets. Interest rate as an essential factor in conventional banking is not usable in Islamic banking and other similar institutions that work based on partnership, such as mutual funds and saving and loan associations.
Originality/value: Approach of this system is entirely different from the conventional banking. In addition to removing usury in banking activities, Rastin Banking uses the best practical ethic finance to creating safe and public confidence environment for banking operations.
Article Type: Technical paper
Keywords: Rastin Banking, Profit and Loss Sharing (PLS), Partnership, Rastin Profit and Loss Sharing (PLS) Banking, Islamic Banking, Musharakah.

Purpose: This paper aims to define a set of banking operating regulations for financial transparency, corporate governance, and bank information disclosure. Design: Bank governance, financial transparency, and information disclosure are amongst the most important solutions to attract public trust to financial and banking operations. In order to reach this goal, a new set of regulations should be designed to solve the problem. In this way, Rastin Banking regulations can provide a base to obtain a better information circulation and higher clarity. Findings: A draft of regulations for financial transparency, governance, and bank information disclosure is presented in this paper, which can be employed as a basis for the codification of the respective law. Research limitations: Since such kinds of regulations are novel for banks, they are required to be meticulously scrutinized in the first place, and after adaptation, adjustment, and performing the necessary modifications, the code of law can be codified. Practical implications: Bank managers, through granting various concessions to themselves and their own stakeholders, have violated the rights of shareholders, depositors, and other stakeholders. This issue, through applying the governance methods, is adjustable to a great extent. Social implications: This procedure is a model that can be adopted in other countries, especially those countries that have essential ambiguities in their banking and financial operations. Value: Clearly, the lack of transparency in banking operations can gradually weaken the trust of depositors, stakeholders, and shareholders, and result in probable abuses and damages to all parties in the bank's contracts. This article fulfills an identified need and solves the practical problem in financial abuses, corruption, and collusion, and can provide positive and essential effects on creating public trust in financial operations.

Purpose: This paper aims to examine monetary instruments in Islamic central banking framework. As a conclusion, to revive Islamic monetary policy, we should provide some public equity-based instrument as a necessary replacement for conventional bonds and treasury bills to activate non-usury open market operations. Design: We define a type of new negotiable bond as: "Rastin Swap Bonds (RSBs)", which is based on swapping money between two persons for two different periods. Findings: RSB is a financial paper that observes the right for the lender to borrow an equal amount to his lending from the borrower. Four types of RSBs in domestic money and foreign currency are defined, and their Sharia allowances and monetary, fiscal, and financial effects are evaluated. Research limitations: This bond is a novel design, and it is required to be more elaborated for further practical development and adjustment. Practical implications: Islamic central banking is not different from conventional central banking as a whole, but the role of an Islamic central bank in conducting monetary policy is restricted to use interest-free monetary instruments in an environment that commercial banks are obliged to implement non-usury banking operations. Social implications: Islamic financial instruments should be usury-free and efficient in applying monetary, fiscal, and financial policies at different levels of the central bank, government and commercial banks and non-banking money and financial institutions. Rastin Swap Bond will serve as an important instrument for resource mobilization and will be a primary vehicle for the development of the Islamic capital market and central banking operations. Originality/value: Conventional interest-bearing bonds are not allowed in Islamic central banking. This restriction mostly distinguishes Islamic central banking from the conventional one in implementing monetary policy. Article Type: Technical paper

This paper introduces Rastin Swap Deposit account as a new banking deposit account which is interest-free and is based on Swap Contract in Rastin Banking. In this depositing by opening the deposit, the depositor is entitled to use an interest-free loan to the amount and duration that his resources have been being deposited and then return the money back to the bank. Depositor and bank agree that a combination of money and duration be selected in such a way that the products of amount and duration in both operations of depositing and loaning be the same. From the time of depositing to the first maturity (the date that depositor requests loan), the depositor is lender and bank is borrower; and from the time of the first maturity to second maturity (the date that depositor returns the money back to the bank) depositor is borrower and bank is a lender. Rastin Swap Deposit (RSD) can be issued in both local and foreign currencies.

In addition to removing Riba in banking activities, and by observing Islamic banking principles, and creating safe and public confidence environment, Rastin Banking can lead to important positive effects on growth and economic welfare through money and capital markets. In this paper, we refer to the headings set forth in Rastin Banking and its pillars of Rastin PLS banking. Rastin Banking is a new approach in the banking industry.

Purpose: This paper aims to explain new insurance products and policies in Rastin Profit and Loss Sharing (PLS) Banking. Rastin Banking is a full Islamic Banking System with all necessary parts for banking operations that can be installed in conventional and Islamic banks both. In this paper, we are going to explain the milestones of new insurance products and policies. Design: Rastin Banking complies with the nature of the intermediary financial activity and has a new type of banking operations. The systems and instruments of this type of banking have different risk treatments, and new insurance policy and measures should be defined to cover the risks of the operations In order to fulfill this goal, appropriate insurance policies are described. Findings: Some new insurance products are defined such as Certificate Insurance, Insurance of Market Value of

Purpose: This paper aims to examine monetary instruments in Islamic central banking framework. As a conclusion, to revive Islamic monetary policy, we should provide some public equity-based instrument as a necessary replacement for conventional bonds and treasury bills to activate non-usury open market operations. Design: We define a type of new negotiable bond as: “Rastin Swap Bonds (RSBs)”, which is based on swapping money between two persons for two different periods. Findings: RSB is a financial paper that observes the right for the lender to borrow an equal amount to his lending from the borrower. Four types of RSBs in domestic money and foreign currency are defined, and their Sharia allowances and monetary, fiscal, and financial effects are evaluated. Research limitations: This bond is a novel design, and it is required to be more elaborated for further practical development and adjustment. Practical implications: Islamic central banking is not different from conventional cent...

The purpose of this study is to change huge structures such as the banking sector of a country needs special innovative methods. This paper shows how we can manage change in a banking sector of a country. Grafting novel efficient processes, and pruning old inefficient ones, and harmonising the organization with new processes and empowering the staff through apprenticeship and knowledge management can put forward the change management. The proposed method of "Prune and Graft of Process" similar to grafting a shoot or bud of a sweet-fruited tree to a bitter-fruited base tree is significant in change management. Accordingly, new processes should be grafted to the system, and all processes that are theoretically or practically against the goals of the organisation should be pruned. New processes and innovations could automatically change the bank performance. Apprenticeship and knowledge management are highly effective in all stages of forming and implementing the change. This plan was formed and tested in Bank Melli Iran in order to propose a model for other banks as well. In a view to explain the applied method of change management in the banking system, we study the steps that Rastin Banking was formed in Bank Melli Iran as a sample. Efficient changes and reforms of large organizations can prevent the society from enormous hurts.

Purpose: This paper aims to define a set of banking operating regulations for financial transparency, corporate governance, and bank information disclosure. Design: Bank governance, financial transparency, and information disclosure are amongst the most important solutions to attract public trust to financial and banking operations. In order to reach this goal, a new set of regulations should be designed to solve the problem. In this way, Rastin Banking regulations can provide a base to obtain a better information circulation and higher clarity. Findings: A draft of regulations for financial transparency, governance, and bank information disclosure is presented in this paper, which can be employed as a basis for the codification of the respective law. Research limitations: Since such kinds of regulations are novel for banks, they are required to be meticulously scrutinized in the first place, and after adaptation, adjustment, and performing the necessary modifications, the code of l...

In this paper, we are going to introduce a new IT master solution to improve the non-usury banking performance. All divine religions emphasize on usury prohibition. It is concluded that with some IT solutions, it may be possible to fulfill worldly requirement by use of IT systems without any incredulity. Since depositors are shareholders of Non-Usury Bank Corporation (NUBankCo), therefore integrated information systems can provide suitable infrastructure for transactions recording and management done by all participants' chains; and the end of process the yields of investment capital of depositors that invest in real economy can be distributed by safe delivery channels such as branches, ATM, WEB, Meaningful WEB. IT (as BPR, ERP, CRM, SCM, MES, MEX, HRM, WFM) that use single and integrated data warehouses) accompanying with standardization in all processes not only prepare PLS mechanism as main difference between conventional and non-usury banking but also simplify risk managemen...

Rastin Swap Card is defined in Rastin Banking. This card is issued based on the Swap Contract in Rastin Banking or principle of sovereignty rights of contracts. In Rastin Swap Card there are two periods. In the first period card issuer lends money to the cardholder, and in the second period borrows money from card holder instead. At the first stage card issuer credits a certain amount of money for specific time duration to the card of cardholder and requests the cardholder to deposit the same amount for the same period at the end of the cited time duration (first maturity) in the issuer's deposit account. Card issuer and cardholder can agree for a combination of amount and duration for which the product of them (amount by the duration) be equal for both operations of lending money by the issuer and depositing by the cardholder.Rastin Swap Card (RSD) has no interest rate and is different from conventional debit and credit cards, but considering the ICT-based systems, RSD is being processed and managed through electronic banking systems. Rastin Swap Card can be issued in both local and foreign currencies. Bank receives a fee by offering Rastin Swap Card service.

This paper aims to explain the operational and legal infrastructure of Rastin Profit and Loss Sharing (PLS) Banking. Rastin Banking is a full Islamic Banking System with all necessary parts for banking operations that can be installed in conventional and Islamic banks both. In this paper, we are going to explain the milestones of Rastin PLS banking operational framework. Rastin Banking complies with the nature of financial intermediary activity (partnership of depositor in the yields of the fund receiver via the bank). In order to fulfil this goal, particular formation, organisational structure, instruments and workflow are defined in a legal framework. To handle Rastin Banking, the particular theoretical and operational regulatory frameworks and legal context of the contracts should be defined to fulfil the participation operations. In this paper, we will have a look at the necessary legal environment to setup Rastin Banking. This system is novel, and requires more elaborations for further practical development and adjustment. In this system, the investment return of the participation is distributed to the parties of financial partnership (depositor, entrepreneur and bank), and it is done by eliminating fixed interest rate, and it is based on the real economy profit (return) of the activity. Rastin Banking can lead to important positive effects on growth and economic welfare through money and capital markets. Interest rate as an essential factor in conventional banking is not usable in Islamic banking and other similar institutions that work based on partnership, such as mutual funds and saving and loan associations. Approach of this system is entirely different from the conventional banking. In addition to removing usury in banking activities, Rastin Banking uses the best practical ethic finance to creating safe and public confidence environment for banking operations.

Based on the working in different fields of sciences for a long time, a solution to change the structure of banking products as a solution to economic crises is proposed. By sharing the risks economically this solution can make economic integrity among all economic sectors.In this paper, we are going to introduce a new Islamic financial institution with elaborated economic and financial characteristics. «Non-Usury Bank Corporation» (NUBankCo) is defined in a way that depositors are the shareholders of the Bank. This corporation is a new kind of shared ownership corporation, which its shareholders are deposit holders and their deposits work as corporation's equities. The defined bank can perform non-usury operations, and by designing a behavioral model, it is shown that NUBankCo can draw an environment that the welfare of society is to be maximized. Mobility of deposit resources in NUBankCo is less than conventional banks, and there are fewer conflicts between large and small shareholders/depositors and limits the emergence of shareholders' cartels and thus huge sudden outflow of funds which creates bankruptcy crises.

Purpose: This paper aims to explain the organizational structure of Rastin Profit and Loss Sharing (PLS) Banking. Rastin Banking is a full Islamic Banking System with all necessary parts for banking operations that can be installed in conventional and Islamic banks both. Design: Rastin Banking complies with the nature of the financial intermediary activity (the partnership of depositor in the yields of the fund receiver via the bank). To fulfill this goal, particular organizational structure, accompanying with instruments and workflow are defined. Findings: To handle Rastin Banking, particular theoretical and operational regulatory frameworks should be defined to fulfill the participation operations. In this paper, we will have a look at the necessary organizational structure to setup Rastin Banking. Research limitations: This plan was formed and tested in Bank Melli Iran in order to propose a model for other banks as well. Practical implications: In this system, the investment retu...

Expansion and development of social networks have provided new backgrounds for financial activities. Based on Rastin Banking Regulations, crowdfunding can be installed to apply social networks in the direction of Islamic finance. Two methods of crowdfunding are introduced in Rastin Crowd Funding. Sponsor Crowd Funding (SCF) is for the absorption of peoples’ funds for special protective goals in the form of non-profit and free payments to an entrepreneur through banks. Peer to Peer Loan (PPL) is defined for absorption and collection of peoples’ funds for extending interest-free loans to a specific project of an entrepreneur.Regarding the characteristics of crowdfunding and application of social networks, the Crowd Funding System (CFS) is used as a web-based portal for absorption and collection of money resources for crowdfunding project through social networks in Rastin Banking.

Purpose: This paper aims to explain new insurance products and policies in Rastin Profit and Loss Sharing (PLS) Banking. Rastin Banking is a full Islamic Banking System with all necessary parts for banking operations that can be installed in conventional and Islamic banks both. In this paper, we are going to explain the milestones of new insurance products and policies. Design: Rastin Banking complies with the nature of the intermediary financial activity and has a new type of banking operations. The systems and instruments of this type of banking have different risk treatments, and new insurance policy and measures should be defined to cover the risks of the operations In order to fulfill this goal, appropriate insurance policies are described. Findings: Some new insurance products are defined such as Certificate Insurance, Insurance of Market Value of Certificate, Responsibility/Engineering Insurance, Insurance of Accidents Concerning the Article of Sharing, Collateral Insurance, ...

Based on the working in different fields of sciences for a long time, a solution to change the structure of banking products as a solution to economic crises is proposed. By sharing the risks economically this solution can make economic integrity among all economic sectors.In this paper, we are going to introduce a new Islamic financial institution with elaborated economic and financial characteristics. «Non-Usury Bank Corporation» (NUBankCo) is defined in a way that depositors are the shareholders of the Bank. This corporation is a new kind of shared ownership corporation, which its shareholders are deposit holders and their deposits work as corporation’s equities. The defined bank can perform non-usury operations, and by designing a behavioral model, it is shown that NUBankCo can draw an environment that the welfare of society is to be maximized. Mobility of deposit resources in NUBankCo is less than conventional banks, and there are fewer conflicts between large and small shareho...

Expansion and development of social networks have provided new backgrounds for financial activities. Based on Rastin Banking Regulations, crowdfunding can be installed to apply social networks in the direction of Islamic finance. Two methods of crowdfunding are introduced in Rastin Crowd Funding. Sponsor Crowd Funding (SCF) is for the absorption of peoples' funds for special protective goals in the form of non-profit and free payments to an entrepreneur through banks. Peer to Peer Loan (PPL) is defined for absorption and collection of peoples' funds for extending interest-free loans to a specific project of an entrepreneur.Regarding the characteristics of crowdfunding and application of social networks, the Crowd Funding System (CFS) is used as a web-based portal for absorption and collection of money resources for crowdfunding project through social networks in Rastin Banking.

Despite development and extension of different ways of financing in financial markets, encompassing Islamic and conventional financing, the mechanism of Electronic Funds Transfer (EFT) of project financing both as borrowed and non-borrowed methods has not been considered at most. Moreover overall IT infrastructures development namely Real Gross Settlement System (RTGS), Automatic Clearing House (ACH), Scriptless Security Settlement System (SSSS) and International Bank Account Number (IBAN) for authentication process and the international meta bank network of Single Euro Payment Area (SEPA) and also international integrated banking networks including the Society For Worldwide Interbank Financial Telecommunication (SWIFT) and Interbank Information Transfer Network (Shetab), and other accomplished endeavors are not efficient in absorbing international contributions for project financing through foreign exchange funds in the different countries, satisfactory E-Payment mechanism in informative portal systems for investment projects are weak. In this way, the role of applying E-Payment systems for attracting foreign investment through retail resources mobilization and design of financial instruments with the capability of transacting in the secondary markets should be reconsidered. In this paper by having a glance at different types of investment project financing, we introduce a new project financing mechanism based on E-Payment with non-usury financial instruments to complete investment project financing chain in the form of Rastin Profit and Loss Sharing (PLS) banking.Sharia compliance of financing instruments in one side and accessibility in absorbing international retail foreign exchange sources on other side are two fundamental discussible items in this paper. In this way by designing a new system of "Non-Usury Scriptless Security Settlement System" (NSSSS) with non-usury mechanisms-avoiding legislative (Sharia) circumvention-can provide the two cited goals in designing non-usury financing instruments through IT-based non-usury financial innovations which includes of Rastin Certificates in Rastin PLS banking, and Non-Usury Bonds namely Rastin Swap Bonds.

Installment Financial Sharing (IFS) is a subsystem of Rastin Profit and Loss Sharing (PLS) Banking System, and the guidelines, instructions, organization, workflow and electronic mechanism of Rastin PLS Banking have been put forward for this subsystem as well. Profit in this financial sharing method is based upon the yield of the real sector, and bank as an intermediary of funds, receives a commission as like as an agent, and provides capital management and financial services to financer (depositor) and participates in investment project of the entrepreneur on behalf of the depositor. In installment Financial Sharing, the contribution of the depositor is paid back by installments and ownership of the project is finally transferred to entrepreneur.Financial innovations of "Mughasatah Certificate" and "Musharakah Mughasatah Certificate" and "Rental Mughasatah Certificate" are used in this subsystem. The financer (depositor) of sharing project receives a certificate, which is negotiable in Rastin Certificate Market via the internet.