Electronic Money Transfer in Gov't Organizations

EghtesadOnline: Central Bank of Iran has introduced a mechanism since November that allows payments among administrative bodies to be transferred electronically instead of checks.

News ID: ۷۸۴۴۹۲

19 January 2019

According to the CBI website, as per the provisions of the Monetary and Banking Law, the CBI is a government banker tasked with holding its financial accounts and processing all its inbound and outbound transactions.

However, due to the centralized nature of the CBI and the fact that the bank doesn’t have any operating branches in the country to fulfill its duty as the account-holder of the government, it temporarily delegated relevant duties to some public banks long ago, Financial Tribune reported.

The CBI pointed to the flaws of the previous payment mechanism and reckoned the problems posed by commercial banks that hold government accounts, namely “multiple public accounts, the prolonged process of receiving government revenue, inability of bankers to fulfill their tasks and lack of online supervision of the treasury.”

Masoud Rahimi, director of the CBI Office for Banknote Issuance, said the system is designed in a way that payment is handled electronically among beneficiaries and after receiving final approval, money is transferred to the destined account within the shortest possible time.

The system operates on the national information network that requires token identifying signatories, rendering it highly secure, Rahimi said.

“Henceforth, public organizations are equipped with this new and safe instrument and the time-consuming paper-based payment process is over.”

Rahimi had said earlier that 4,200 state-owned companies’ bank accounts were transferred to the CBI in  March 2017, when President Hassan Rouhani issued the landmark directive to build transparency in government finances and public expenditure.