CBI Will Fully Tackle Shadow Banks by Sept.

EghtesadOnline: All illegal credit institutions will be fully organized and sorted out by the Central Bank of Iran and the parliament up to the first half of the next fiscal year in late September, the head of Majlis Economic Commission said.

News ID: ۷۸۱۹۶۲

03 March 2018

“Based on what was decreed in the joint meeting of MEC and CBI representatives, we agreed that CBI would clearly announce its plan to finalize the situation of the illegal credit institutions in the next few days,” Mohammad Reza Pour-Ebrahimi was also quoted as saying by IRIB in a televised interview on Monday night.

“CBI will remove all the contradictions concerning the credit institutions by the end of the current year (March 20),” the lawmaker added, elaborating that several discrepancies exist between data gathered by the central bank and the field data.

“It was decreed that each bank would offer the people a system so that the latest condition of credit institutions could be viewed,” Financial Tribune quoted him as saying.

Pour-Ebrahimi noted that his parliamentary commission has thoroughly reviewed reports on how illegal credit institutions were formed in the first place and called on the judiciary to deal with those responsible in the current or former administration, and report to the public.

The shadow banks, which obtained their permits from entities other than the monetary regulator CBI, gained traction and grew exponentially during the two-term tenure of the former administration, and at one stage held up to 25% of the country’s liquidity.

The lawmaker met with CBI representatives headed by CBI Governor Valiollah Seif on Monday to help finalize the policy concerning shadow banks, including clearing any remaining debts to their former depositors.

Pour-Ebrahimi stressed that one of the current orders of business for his commission is to overhaul CBI’s supervisory structure.

“The central bank’s oversight structure is traditional and tackles each problem after it has happened. This is while its supervision must be up-to-date, online and preventive,” he said.

Following the meeting, Seif said special groups are being formed within all institutions with the specific aim of reimbursing depositors.

“We must put in place measures to prevent the formation of more illegal credit institutions in the future, because the country and the people have already suffered many losses. So I hope that recent experiences will prompt government branches to take greater responsibility and always consider CBI permits as the basis,” he told ICANA.