Economy ministry offers banking reform plan to govt.

October 5, 2019

TEHRAN – Iran’s Finance and Economic Affairs Minister Farhad Dejpasand said a program for amending the country’s banking system has been prepared by the ministry and handed over to President Rouhani in late September.

Speaking in a meeting with the CEOs of government-owned banks, Dejpasand noted that the ministry will follow up on the provided solutions in the program through relevant authorities until it reaches a conclusion, Shada reported.

The official noted that government-owned banks (including the biggest lenders) are seriously following a program to relinquish their excess assets and subsidiaries and also reduce the number of branches in order to increase their cash reserves.

Back in February, the government announced launching a program for selling excess properties of state banks, as part of its plans to reform the limping banking sector.

He further stressed that transparency, efficiency and sound management of banks' costs are all bound to the establishment of digital banking as well as the full and effective implementation of corporate governance.

“The Economy Ministry’s Deputy for Banking, Insurance and Government Corporate Affairs is going to rank banks in terms of corporate governance and digital banking deployment,” Dejpasand added.

Dejpasand also urged state banks to continue providing the necessary support to various economic sectors, especially the production sector, as before.

Iran’s banking industry is suffering, among other things, from issues such as poor balance sheets, capital inadequacy, inability to recover non-performing loans to the tune of billions of dollars, arcane rules, and dubious operations of illegal credit institutions that have been punishing the economy for years. 

In late August, Governor of Central Bank of Iran (CBI) Abdolnasser Hemmati said the bank has been working hard to reform the banking system long grappling with mismanagement and financial indiscipline.  

EF/MA

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