New Restrictions on Loans to Bank-Affiliated Companies

EghtesadOnline: The CBI recently obliged banks to regularly publish the names of big defaulters in the hope that it could help recover the billions in bad debt that have almost devastated the banking sector’s lending ability and capacity, hurling some towards insolvency

News ID: ۷۵۱۸۹۲

18 September 2022

The Central Bank of Iran has announced new measures to prevent banks from giving loans to related persons, head of the CBI department for banking health assessment said.

"Rules include caps on bank lending to related persons. The value of every loan paid to subsidiaries or related persons must not exceed 3% of the bank’s base capital. Moreover, the collective amounts lent to related persons must not exceed 40% of the bank capital," Ali Akbar Miremadi was quoted as saying by IBENA.

Subsidiaries and affiliated companies are considered as a bank’s related entities. However, "henceforth shareholders of the bank, affiliated companies or any person that can impact the board's decision will be seen as related entities to whom bank lending is restricted."