Central Bank of Iran blasts banks for not paying debts

Business Materials 18 March 2015 15:35 (UTC +04:00)

Baku, Azerbaijan, March 18

By Khalid Kazimov - Trend:

President of Central Bank of Iran (CBI ) Valiollah Seif has said that in the upcoming Iranian fiscal year (starting March 21), the CBI is going to reshuffle its programs to hold a firmer grip on the country's monetary affairs.

Speaking in a meeting with the organizational executive board members and managers, he outlined the prominent programs for the next fiscal year as further opening the Central Bank's regulatory umbrella, making the money market more integrated, unifying currencies, and organizing the non-current claims in the country's banking network.

Seif also said that controlling inflation will require discipline in the country's financial and monetary system, Mehr news agency reported March 18.

CBI announced February 23 that the inflation rate for the 12-month period to eleventh Iranian calendar month of Bahman (ended on Feb. 20) hit 15.8 percent.

The figure is 0.5 percent less compared to the preceding month.

He added that the early months of the next Iranian fiscal year would be a good time for the Central Bank to redeem its debts to various banks and monetary institutions.

The debt of Iranian banks to the Central Bank exceeded 770 trillion rials (about $22 billion) in the first nine months of the current Iranian year.

The debt of the banking system to the Central Bank rose by 29.6 percent year on year.

Iran's banking system has been struggling with bad loans in the past few years. Melli Bank, Parsian Bank and Bank Tejarat have the highest amount of bad loans in Iran.

Sixty-one persons have debts of over $32 million, accounting for 19 percent of the total debt.

Seif further stated that liquidity hit 21.7 percent for the Iranian month of Bahman (January 20 - February 19), showing a decent decline compared to the same period the previous year, when liquidity was 28.3 percent.

The fact points to the effectiveness of the policies adopted by the Central Bank, Seif asserted.