The Ministry of Economy unveils a new package of measures to reform the banking system

TEHRAN – Iranian Finance and Economic Affairs Minister Ehsan Khandouzi on Saturday unveiled a new package of measures for the management of the country’s banking sector, IRNA reported.

In line with the new year’s motto which is “knowledge-based and job-creating production”, the mentioned package includes policies and strategies that are mainly focused on orienting the country’s banks towards productive sectors, including knowledge-based production.

The reform of the banking system, the promotion of financial discipline, the diversification of financing methods, the improvement of the quality of the interactions of credit institutions with the populations, the facilitation of the access of production units to banking resources and strengthening the self-regulatory and supervisory structures of the banking network are also among the main objectives of this package.

All state-owned banks in the country have been briefed by the ministry on the new banking sector policies and strategies.

Based on the mentioned package, banks are prohibited from investing in financial markets such as foreign currency, gold, coins and real estate.

This means that the country’s banking system will refrain from any activity, including the purchase of land and the construction of commercial, office, residential or commercial complexes other than through acquisitions for the purpose of liquidating the facilities granted to owners .

The package also underlines that in order to optimize the use of allocated resources and to manage resources and expenses and to direct banking facilities towards profitable and value-added activities, credit institutions are required to implement appropriate procedures such that at the end of each year, the ratio between the balance of facilities granted and the balance of deposits (after deduction of legal deposits) must be at least 80%.

Unfortunately, banking regulations in Iran have not changed since [Iranian calendar year] 1362 (March 1983-1984), therefore, experts and actors of economic sectors believe that there are currently ambiguities in the banking system, so its reform and amendment are very vital and important.

In 2019, Iran’s former Minister of Finance and Economic Affairs, Farhad Dejpasand, announced that a plan to reform the country’s banking system had been prepared by the ministry, but the plan was not properly implemented. .

EF/MA

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