<![CDATA[Usury is a criminal offense punishable by Law in Iran, based on Islamic Sharia. The Iranian Constitution explicitly prohibits Usury, and Article 595 of the Islamic Penal Code criminalizes both lenders and borrowers, imposing penalties including imprisonment, fines, and lashing. The purpose of this regulation is to establish a link between banks and the market and to direct funds to the real sector of the economy to achieve development, productivity, and job creation, thus allowing funds to flow directly to producers and traders and circulate in the actual goods market. However, financial institutions continue to use traditional interest-based methods, and a decision by the Monetary and Credit Board allows monthly "pre-profit" payments to depositors, effectively eliminating the concept of interest-free banking. Pre-profit is distributed before the bank uses its funds for products or business partners, incurring monthly expenses for the bank even before financing activity begins. Consequently, the cost of capital increases as interest rates rise. In writing this article, we conducted a literature review using a qualitative approach and descriptive explanations. We found discrepancies between anti-usury laws and banking practices in several areas, despite considerable efforts and determination to avoid Usury. Funds available in banks are sometimes not circulated in the production sector, remaining more consumptive and diverted to speculative markets, leading to inflation and bank failure. Banking laws and their role must be revised to directly engage with production factors, which are overseen by the Fiqh Council of the central bank and state-owned banks.]]>
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