A Theoretical Comparison of the Efficiency of a Free-interest Banking System with an Interest-based Banking System in Collection and Allocation of Resources

The interest rate in the money and banking subjects has its special importance and acts as the equilibrium factor in money market. At the same time according to the Quran paying and receiving of interest is forbidden in Islam. Forbiddance of paying and receiving interest in Islam from one side and the importance rule of this variable in economy discussions from the other side is an important challenge which the Moslems and Islamic societies are faced with it. Free of interest banking system as a solution for this difficult has been used in a lot of Islamic countries and so in some of non Islamic countries. Although the free of interest banking system has some difficulties, bottlenecks and constraints but it has some advantages in respect to with interest banking system. Identification of the advantages and bottlenecks of the interest free banking system in collecting and allocating of funds resources are the main purpose of this paper. Specifying of the approaches of collecting funds resources in free of interest banking system and with interest banking system, Specifying of the approaches of allocating funds resources in two banking system and analyzing and comparing of two banking system in collecting and allocating of funds resources are titles which are discussed in this paper.