Call for Streamlining Bank Balance Sheet

EghtesadOnline: In the wake of reports alleging disagreements between the Central Bank of Iran and the Economy Ministry regarding the format of banks and credit institutions’ financial statements, the head of Majlis Economic Commission announced that it has penned a letter to President Hassan Rouhani, asking him to speed up the process of managing banks and credit institutions’ financial statements.

News ID: ۷۷۸۴۲۵

15 August 2017

“Iran Audit Organization, which is affiliated to the Economy Ministry, has asked companies to present their financial statements in line with its standards while CBI considers itself responsible for supervising banks’ activities and entitled to determine the template of financial statements,” Mohammad Reza Pour-Ebrahimi was also quoted as saying by Islamic Consultative Assembly News Agency.

In August 2016, Director of CBI’s Office for Banking Supervision Abbas Kamarei announced that the Central Bank of Iran, Economy Ministry and Iran Audit Organization agreed on the new framework for banks’ financial statements and their audit but, according to Pour-Ebrahimi, the issue continues to rattle these entities.

Kamarei noed that disputes between CBI and the Economy Ministry forced banks to prepare two versions of financial statements, one to present to CBI and the other for the audit organization, Financial Tribune reported.

“This will eventually become an issue since it is not acceptable for a bank to have two financial statements based on two different standards,” he said.

CBI last year developed the new template for financial statements based on International Financial Reporting Standards and in accordance with usury-free banking regulations.

Commenting on shadow banks that have been the hot topic of the Iranian banking system in recent months, Pour-Ebrahimi announced that after several meetings and discussions in Majlis Economic Commission, it was agreed that CBI measures to manage uncertified credit institutions have not been convincing.

“As the CBI’s report did not convince MPs, eventually the economic commission called for the implementation of Article 236 and drafted a report to be read in the next open session of the parliament,” he said. Article 236 states that if at least 10 members of the parliament or any of its commissions announce that the president, a minister or any official in their subordinate entities have “not adhered to norms or have violated or refused to implement the law or have executed it incompletely”, proceedings leading to the official’s impeachment can start and the case will be sent to the judiciary.

Pour-Ebrahimi noted that the parliament’s open session has been delayed for a while but it will take place by the end of this week.