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EghtesadOnline: Iranian banks' loan portfolio expanded by 40% during the year to March 20 despite grappling with a credit shortage, said the governor of the Central Bank of Iran.

"Banking system doled out 4,770 trillion rials ($127.2 billion) to various business sectors during the 11 months to February 18 and the figure should have crossed 5,000 trillion rials ($133.3 billion) by the end of the year," Valiollah Seif was also quoted as saying by

The CBI governor noted that fortunately, in the latest Cabinet meeting, President Hassan Rouhani expressed his satisfaction with the banking system's efforts.

Iranian lenders have recently come under fire for refusing loans to smaller businesses and for charging higher-than-normal interest rates that render economic activity all but impossible, according to Financial Tribune.   

"CBI endeavors to change the banking system for the better by balancing their incomes and expenses, and creating equilibrium in assets and debts," he added.

Seif also dismissed the exaggerated criticisms of banking system, calling them unfounded, noting that CBI is doing its best to put everything in their right place.

According to a report published on CBI's official website, bank loans in 2012 stood at 1,956 trillion rials ($51 billion), climbing significantly for the next three years to reach 4,173 trillion rials ($109 billion).

 By the end of the 11th month of the previous fiscal year on Feb. 18, banks had offered 7,005,257 loans to all sectors of the economy, the CBI report said.

A sector-by-sector assessment showed the services sector took the largest share of the total loans. The figure stood at 1.87 trillion rials ($50.07 billion), which account for 39.3% of the total loans in the first 11 months of the previous Iranian year.

Industries and mines also had a fair share, with the sector’s loans standing at 1,395 trillion rials ($37.2 billion), accounting for 29.2% of the total amount.

Iran Banking Valiollah Seif Central Bank of Iran Iran banks Iran banks lending