Baku, Azerbaijan, Apr.30
By Fatih Karimov - Trend:
Iran banned opening bank deposits of over one year.
Abdolnasser Hemmati, Chairman of the coordination council of Iranian state-run banks, said that the banks have reached agreement not to allow clientele to open accounts of over one year, Iran's IRNA news agency reported on April 30.
He added that the ceiling of bank interest rates was set at 22 percent.
The new rates will be applied as of Saturday, he noted.
"Some of financial institutions used to pay 27-28 percent interest to long-term deposits. That had been contributed to an imbalance in the currency and housing markets," he explained.
In August 2013, the Central Bank of Iran (CBI) governor Valiollah Seif said that bank interest rate should be set proportional to the inflation rate.
He added that interest rates should be revised, so that it should be less than the inflation rate.
Iran's Fars news agency reported on April 22 that domestic banks owed a total of 620 trillion rials (about $24.3 billion) to the Central Bank, a 27.1 percent rise year on year.
CBI governor Seif has confirmed that the national banking system's bad loans has reached 800 trillion rials (about $32 billion), the Mehr News Agency reported on Jan. 8.
Many factors are involved in bad loans, such as the international sanctions and mismanagements in the banking system, Seif said.
The Central Bank has set up a special working group to follow up the case and collect the debts, he noted.
Signs of economic growth can be seen in production growth and liquidity decline in the market, Seif explained.