Tehran, Iran, July 7
By Mehdi Sepahvand –- Trend:
The Iranian government is going to regulate unlicensed financial and credit agencies by the end of the current fiscal year (March 20), according to Valiollah Seif, president of Central Bank of Iran.
According to Seif, when President Hassan Rouhani took office in 2013, 25 percent of Iran’s cash flow would be circulated via such agencies, while at present the number has shrunk to 8 percent, Mehr news agency reported July 7.
Despite all modernization efforts, Iran is still a cash-based economy where banks and financial institutions play a significant role.
Ever since the privatization of the banking sector in the early 2000s, the Central Bank of Iran (CBI) has had to deal with a phenomenon of non-bank credit institutions, which are more commonly referred to as credit and financial institutions (CFIs).
The legal framework for these organizations was established in the country’s pre-revolutionary commercial code, but it had not been used in the first two decades of post-revolutionary Iran when all banks and financial institutions were nationalized.