Mandatory Loans Hurting Banks’ Limited Resources

EghtesadOnline: The new CBI boss Mohammad Reza Farzin has urged the parliament to take banks' shrinking resources and related challenges into account before ordering the lending largesse.

News ID: ۷۵۲۲۲۹

06 February 2023

The government has placed new demands on lenders in the 2023-24 budget obliging them to continue giving cheap loans to a wide range of applicants.

However, economists have voiced renewed concerns saying that such decisions are ill-informed and must be made in accord with the lending power of banks.

Iraj Nadimi, an economist and a former MP, is of the opinion that subsidized loans “do not necessarily” hurt bank resources so long as the government pays the difference in the interest rate paid by borrowers and those set by the Money and Credit Council, IBENA reported.