Azerbaijan, Baku, May 29/Trend M. Moezzi
The head of Tehran's Chamber of Commerce and Industries and Mines (TCCIM) has expressed his worries over the health of Iran's banks.
Banks' outstanding receivables, that is the money they're owed, has surpassed $44 billion (USD) while their loan to deposit ratio is 109 per cent, Mehr news agency reports Yahya Ale-Eshaq, the TCCIM's chairman, saying.
The figures are a sign that it's time to rethink the banking system, said Mr. Ale-Eshaq who added delays will cause greater economic problems for Iran.
Equally worrisome is the absence of good relations between the banks and the Central Bank of Iran.
Financing is one of the private sector's biggest challenges. The cost of financing for the private sector is 2.5 times that of its competitors which in turn, increases the need for funds.
Another issue is the interest rates banks charge on lines of credit (LOC). While the rule is a 10 to 20 per cent interest rate on LOC's, it can be as high as 120 per cent in Iran, said the TCCIM's head.
Iran's economy is under increasing stress as the U.S. and its allies have ratcheted up sanctions against the country. These are designed to punish Iran for a nuclear programme it says is domestic and the West contends is military in nature. The latest sanctions were levied against Iran's Central Bank, making it very tough to conduct international monetary transactions. The U.S. has also been pressuring countries to stop buying oil from Iran. The European Union is scheduled to do so on July 1.
The second round of talks between Iran and the permanent members of the United Nations Security Council plus Germany (P5+1) finished in Baghdad last week.