Central Bank of Iran Issues AGM Permits for 20 Lenders

EghtesadOnline: The Central Bank of Iran issued 20 permits as of Saturday for banks and credit institutions to hold their annual general meetings for the previous financial year that ended in March.

News ID: ۷۸۴۰۷۰

24 September 2018

According to the CBI, a total of 36 lenders have to hold their AGMs this year, the bank reported on its website, cbi.ir.

With their books in disarray, many banks and financial institutions tend to hold their general meeting with delays in the past couple of years, especially after the CBI tightened its supervisory noose around lenders' necks.

CBI added that three banks and credit institutions, whose financial statements have been audited and the final drafts of the auditors’ report have been received, are being evaluated with the result expected to be finalized in the next few days, Financial Tribune reported.

There have been no requests for holding AGMs, presenting audited financial statements, and final drafts of auditors’ report from the remaining 13 banks and credit institutions up until the aforementioned date, the bank said.

CBI in July 2017 released a directive emphasizing that banks and credit institutions must avoid releasing conflicting financial statements. It also considered it vital for banks and credit institutions’ independent auditors to only consider financial statements that are compatible with CBI’s framework, avoiding any vague conditional articles that are hard to understand for shareholders and users.

Banks have had problems finalizing their balance sheets and holding their annual general meetings ever since IFRS-based templates were notified.

Major Issues

Iranian banks and credit institutions have long suffered from an array of major issues, including, but not limited to, a huge credit crunch, a very high ratio of non-performing loans and weak conformity to international standards.

Rahmatollah Akrami, caretaker at the Economic Ministry,  on Sunday called for dissolving surplus, loss-making bank branches during the annual general meeting of Bank Sepah.

He said that this, combined with selling excessive assets and properties, would need a careful, clear plan, the Bank Sepah website reported.

During the meeting, deputy minister of cooperatives, labor, and social welfare, Ali Sarzaeim, commended the state-owened Sepah for its endeavors to reduce branches and sell excessive property.

“Considering the increase in house and property prices during the current year, selling excessive property would lead to more transparency in the bank’s balance sheets,” he said.

In addition, Sarzaeim believes government debts should be sold as bonds, saying that turning government’s arrears into bonds by at the request of banks could create new sources of cash for banks.

Deputy minister of agriculture, Abdolmehdi Bakhshandeh,  pointed to the satisfactory cooperation between Bank Sepah and the Ministry of Agriculture and emphasized the bank’s role in providing the financial resources for water projects as well as constructing irrigation and drainage networks in western Iran. In his words, the Ministry of Agriculture and the Ministry of Energy have bankrolled the project which has so far cost $8 billion.

CBI authorities have announced that Bank Sepah is to acquire several banks owned by military organizations and form one big, efficient lender to serve the families of military personnel.

Farshad Heydari, CBI's former deputy for supervision, said in March that three financial institutions, namely Hekmat Iranian, Ghavamin and Kowsar, are to be merged before the end of this fiscal.