Abstract
Low rate of return of National Development Fund (NDFI) resources and the concern regarding Sovereign Wealth Funds (SWFs) motivations and incentives to distort financing toward those investments and companies that are influenced by different political pressure groups and other types of corruptions are important problems with these funds.We try to propose a different financing procedure by using Rastin Banking mechanism and standards to fulfill both non-usury financial operations and fruitful supervised investments. This goal is achieved through Rastin Profit and Loss Sharing (PLS) system through Rastin Certificates financial instruments. Moreover, the governments operationally construct SWFs to use their surplus resources of the prosperity period in recession and crises years. We also show that Asset and Liability Management (ALM) of SWFs can be done by using Rastin Swap Bonds (RSBs) that are other Rastin Banking financial instruments.The proposed procedures positively improve NDFI regarding corruption reduction, supervision, preventing usury, availability of resources, funds stability, transactable instruments, operational ALM, rate of return, risk of bad loans, outstanding claims and transparency.
Highlights
Assets and Liabilities Management (ALM) consists of technical instruments and methods, which consider both value creation and risk control
We show that ALM of Sovereign Wealth Fund (SWF) can be done by using Rastin Swap Bonds (RSBs) that are other Rastin Banking financial instruments
Islamic financial activities based on Islamic faith must stay within the limits of Islamic law in all actions and deeds
Summary
Assets and Liabilities Management (ALM) consists of technical instruments and methods, which consider both value creation and risk control. Jurisprudence specifications indicate that time is not the sole effective factor on increasing equity (deposited capital) return, but profit and loss sharing resulted from investment in the real economy sector is the essential base for monetary transactions These two important factors are considered in Islamic ALM of any financial fund. The concern regarding SWFs motivations and incentives to distort financing toward those investments and companies that are influenced by different political pressure groups and other types of corruptions are very important and have been led to pushing SWFs to increase their transparencies.8 To reduce this concern, in this paper, we try to propose a slightly different financing procedure by using Rastin Banking mechanism and standards to fulfill both non-usury financial operations and fruitful supervised investments. "Santiago Principles" http://www.iwg-swf.org/pubs/eng/santiagoprinciples.pdf 6- Preqin Ltd., (2012), The 2012 Preqin Sovereign Wealth Fund Review, Preqin Review. Http://www.bidabad.com/doc/rastin-bank-general-en.pdf 11- National Development Fund of Iran. 12- National Development Fund of Iran. http://en.ndf.ir/about-us/by-law.aspx 13 - National Development Fund of Iran. http://www.ndf.ir/Portals/0/farayand.zip 14- National Development Fund of Iran. http://en.ndf.ir/about-us/procedures.aspx
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