From the very beginnings of Islamic banking (Third Generation Finances), which we associate with the second half of the 20th century, this component of the Islamic financial system is constantly in the expansion. We are talking about the concept that rests on the prohibition of interest as a way of acquiring material wealth. The focus of this work was to investigate the extent of the influence of Islamic banks on the economic development of countries, in particular, Iran and Saudi Arabia, as the two largest players of the entire Islamic financial system, on some of the basic indicators of the country's development, such as GDP (Gross Domestic Product), unemployment rate and living standard. Characteristic for the countries that are taken as samples is the fact that banking in Iran takes place exclusively in Islamic banking conditions, with several private banks that appear as exceptions to this rule, but their number is negligible. On the other hand, there is a dual banking system in Saudi Arabia. Another very important component of this work is the presentation of the differences between the two major Islamic groups of Muslims, that is, between Sunni and Shia Muslims and the possible impact on the functioning of Islamic banks in one, as well as in the other Muslim group. Throughout the work their basic characteristics will be presented, as well as what distinguishes them and to what extent their mutual differences affect the operations of banks in one and in the other country. The research part of the work will show the degree of possible positive or negative impact of Islamic banks (Third Generation Finances) in Iran and Saudi Arabia on GDP growth rate, unemployment and living standards. Comparative analysis of Iran and Saudi Arabia will be used for comparison, with the following hypotheses: Zero hypotheses (H0): Islamic banking (Saving and Total Investment) has no impact on GDP of Iran. Alternative hypothesis (Ha): Islamic banking (Saving and Total Investment) has an impact on GDP of Iran. Zero hypotheses H0: Islamic banking (Saving and Total Investment) has no impact on the GDP of Saudi Arabia. Alternative hypothesis (Ha): Islamic banking (Saving and Total Investment) has an impact on the GDP of Saudi Arabia. Zero hypotheses H0: There is no difference between Iran and Saudi Arabia in the degree of influence of Islamic banking (Saving and Total Investment) on economic development. Alternative hypothesis (Ha): There are differences between Iran and Saudi Arabia in the extent of the impact of Islamic banking (Saving and Total Investment) on economic development.