Risk Management in the Interest Free Banking

Risk exists in all economic activities, so it is necessary to plan some artifices for controlling the risk of economic activities. The risk management is very important to control and reduce these risks. Banks as the economic institutions which are intermediates between depositors and applicants of loans, try to reduce risk and prevent transfer it to depositors on account of more motivation to keep and increase deposits. According to the fixed interest rate in the interest banking, banks transfer the risk to the applicants of loans and thus they face with lower risk, but in the interest free banking, they must act in determined frameworks which were determined by shariah, as a result they cant hold a fixed interest rate and the rate will be found after checking the act in one of the Islamic contracts. Therefore it seems the risk management is more important in the interest free banking. At the beginning of the paper, this object will be explained, then we will have a review of literature and afterwards theoretical analysis will be presented and finally summary and political advices will be mentioned.