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This paper aims to explain a new system of accounting for partnership financing that applies in Rastin profit and loss sharing banking. In this system, the interest rate is not used in calculations and accounting, and instead, the “time value” of capital based on the amount and duration of the partnership is used.

Rastin Partnership Accounting principles have been founded on off-balance-sheet items and on the basis of the institutions’ obligations to the depositors and receivers of financial resources, and they are in compliance with the nature of the financial intermediary activity (a partnership of depositor in the yields of the fund receiver via the bank).

The distribution of profit among stakeholders (including workforce and capital owners) is accomplished according to the share of each beneficiary in the created value added. In this regard, Euler’s theorem, as the best mathematical-economic innovation for distribution of income is applied.

This system is novel, and it is required to be more elaborated for further practical development and adjustment.

In this accounting system, the return of the partnership is distributed among sharers based on the amount and duration of their partnership. The penalty for delay in payment is calculated from the amount of the incurred loss due to negligence or blameworthy of the undertaker and not upon a penalty interest rate.

Interest rate as an essential factor in conventional accounting is not usable in Islamic banking and other similar institutions that work based on partnership, such as mutual funds and saving and loan associations. The proposed system removes this shortage and is fairer than the conventional accounting.

Approach of this accounting system is fully different from the conventional accounting because of intrinsic characteristics of the intermediary role of financial partnership institutions and Islamic banks.

This paper aims to discuss some of the operational Islamic banking features considered in ethical banking as the aspects of Rastin Banking. Ethical banking is a branch of “ethic economics” and a narrow expression of a number of Islamic banking aspects.

These features are often involved in the discussions under the topic of internal control and describe the operational characteristics of ethical banking within the framework of Rastin Banking.

This study refers to the principles of Rastin Banking, including operational, financial, economic, ethical, social, legal, international and organizational principles. Additionally, it takes into account some of the internal control systems.

Converting ethical codes into executable laws and regulations needs sophistication, and the art of codification in this subject can be observed in the present paper.

As far as the ethical behaviour of the assessor and trustee is concerned, the necessities of honesty, belief, virtuosity, rectitude and compliance with moral values, as well as reward and punishment mechanisms, are operationally examined. Transparency, governance and disclosure of information are the other components. The methods of auditing, accounting, inspection and preservation of Rastin Banking achievements are amongst the other matters of concern.

An assiduous attention to the operational details of each of the above-said discussions revealed that the Islamic banking components are capable of covering the topics and discussions beyond ethical banking.

This paper fulfils an identified need to solve the practical ethical problem in operational banking.

This paper aims to define a set of operating regulations for financial transparency, corporate governance and information disclosure for the entrepreneur that applies to bank to receive financial resources.

Corporate governance, financial transparency and information disclosure are among the most important solutions to attract public trust to financial operations. To reach this goal, a new set of regulations must be designed to solve the problem. In this regard, Rastin Banking regulations can provide a base to obtain a better circulation of information and a higher clarity.

A draft of regulations for financial transparency, corporate governance and information disclosure was compiled, and it is presented here briefly in this paper, which can be used as a basis for codification of the respective law.

As such kinds of regulations are novel, they are required to be discussed first, and after adaptation, adjustment and performing the necessary modifications, the text of the law can be codified.

Banks and companies managers, through granting various concessions to themselves and their own stakeholders, have violated the rights of the shareholders, depositors and other stakeholders. This issue, to a great extent is adjustable by applying the governance methods.

This procedure is a model and can be adopted in other countries, especially in countries that have large ambiguities in their banking and financial operations.

Clearly, lack of transparency in financial operations can gradually weaken the trust of depositors, shareholders and stakeholders, and result in probable abuses and damages to all parties of banking contracts. This paper fulfils an identified need and solves the practical problem in financial abuses, corruption and collusion and can provide positive and important effects toward creating public trust in financial operations.

This paper aims to define a new system to facilitate obtaining reliable collaterals and guarantees for financial activities from tangible assets through a new financial instrument of “guarantee certificates”.

This system makes it possible to securitize movable/immovable assets into negotiable paper lots, namely, “guarantee certificates”. Each lot of these certificates can be used as a guarantee or collateral for any guarantee-backed activity in banks or other activities.

The mortgage securitization system (MSS) securitizes tangible assets and provides necessary collaterals and guarantees to be used for different purposes. The operations are carried out through notary offices. This system, as a complementary system of the Rastin Banking system, can also be executed separately.

The system is novel and needs to be more elaborated for further practical development and adjustment. Although this paper deals with only securitization of tangible assets, research can also be extended to securitization of intangible assets, through new institutions and rules.

Many properties and assets can be used as guarantees for observing obligations. The available ways for changing (especially large) properties into small guarantees are not easy and efficient. The MSS was designed to break large assets into many guarantee (certificate) lots and reduce the formalities of mortgaging and its transfer.

This system provides reliance and security upon collaterals and conditions for fast claim-clearing and low formalities without time-consuming adjudication processes.

Complementary systems in Rastin Banking have been designed to solve prevailing problems of banking and financial activities. The MSS was designed to provide necessary arrangements for transforming assets into negotiable papers.

This paper aims to define a set of anti-squandering guideposts to improve the sustainability and efficiency of allocating financial resources to investment projects.

A set of sustainable financing and anti-squandering measures are proposed for a better allocation of the bank’s financial resources. These measures were derived from the doctrine of “ethic economics”, humanitarian principles and Islamic teachings. Rastin banking provides a base to apply these measures.

A draft of the regulations for sustainable financing and anti-squandering measures was compiled for Rastin banking operations, which is briefly presented in this paper and can be used as a basis for the codification of the respective laws.

Such kinds of regulations are novel and need to be deeply discussed in the first place. After adaptation, adjustment and performing the necessary modifications, the text of the law can be codified.

Banks through granting loans, credits and other financial facilities can affect the investment projects in such a way to prevent the extravagant consumption of financial resources in investment projects and consider the sustainable development guidelines.

The proposed guideposts can be detailed and adopted in other countries, especially those that are inefficient in their banking and financial operations.

Wasteful allocation of financial resources leads to the wastage of resources and reduction of productivity and provides benefit neither for the people nor for the society. Hence, the present paper tries to practically solve the problem for financial operations.

The purpose of this paper is to propose joint stock company with variable capital (JSCVC), as financial sharing funds and banks necessitate that their capital and number of shareholders be instantaneously variable. Legal personality and accounts clearing of this type of corporations are different from conventional companies.

JSCVC is a corporation in which capital and shares of shareholders vary by new entrance or withdrawal of shareholders at any point of time.

Interest rate-based calculations were removed and Rastin Sharing Accounting was applied for JSCVS. Shareholders of JSCVC share the company’s nominal capital proportional to nominal values of their shares. Financial outcome of JSCVC is proportional to values of shares weighted by shares duration of participation.

To prevent spoiling of shareholders’ rights, legal procedure of issuing shares for JSCVC should be defined in compliance with domestic commerce laws in any country.

JSCVC can be used by majority of investment funds, credit unions, saving and loan associations, pension and provident funds, thrift saving plans as well as Islamic banks and financial sharing activities. In JSCVC, deposit at a bank is treated as a share of the company (bank).

JSCVC has fair profit distribution and accounts clearing arrangements.

Different variable capital companies have been defined in many countries’ laws, but essential modifications are presented in JSCVC definition to regulate financial sharing arrangements and bank’s performances.

This paper aims to propose a system for settlement of obligations of those who, on the one hand, serially owe someone and, on the other hand, are creditors to other persons. Serial Commitments Clearance (SCC) system provides the necessary arrangements for this purpose.

Theoretical discussions of serial chain of debits and credits were conducted by considering the laws and regulations of commitment clearance.

By considering laws and regulations of commitment clearance and introducing theory of serial chain of debits and credits, this system proposes an algorithm for recognition of serial commitments.

This process is set in connection to the Collateral Registration System and Mortgage Securitization System in Rastin Banking, while considering the legal and operational problems. Accordingly, banks, notary offices and other authorized authorities can clear serial obligations of persons due to their requests and agreements and release their collaterals and guarantees as far as the debts of the persons are equivalent.

This system will cause financial release and efficiency of many economic firms. In addition, banks will gain commission for rendering this service.

SCC is a model that can be used in all countries, especially those which have more uncertainties and traders need more pledges for their transactions.

This study fulfils an identified need to solve practical legal problems in vindication of rights.

This paper aims to study the structural dynamic behaviour of the depositors, banks and investors and the role of banks in the business cycles. The authors test the hypothesis: do banks’ behaviour make oscillations in the economy via interest rate?

The authors dichotomized banking activities into two markets: deposit and loan. The first market forms deposit interest rate, and the second market forms credit interest rate. The authors show that these two types of interest rates have non-synchronized structures, and that is why money sector fluctuation starts. As a result, the fluctuation is transferred to the real economy through saving and investment functions.

The empirical results show that in the USA, the banking system creates fluctuations in money and real economy, as well as through interest rates. Short-term interest rates had complex roots in their characteristic, while medium and long-term interest rates, though they were second-order difference equations, had real characteristic roots. However, short-term interest rates are the source of oscillation and form the business cycles.

The authors tested the hypothesis for USA economy, while it needs to be tested for other economies as well.

The results show that though the source of fluctuations in the real economy comes from short-term interest rates, medium- and long-term interest rates dampen real economy fluctuations and also work as economic stabilisers.

Regarding the applied method, the topic is new.