Opening a Bank Account Got Harder

EghtesadOnline: In line with measures to improve security and transparency of bank transactions, the Central Bank of Iran said it plans to block unidentified transactions in less than two weeks.

News ID: ۷۸۵۷۶۵

13 January 2021

Mehran Mahramian, the CBI vice governor for innovative technologies, said from January 24 all bank payments done via bank accounts whose owners lack registered ID numbers would be refused

The measure will particularly impact bank clients who have not completely registered their identity with banks.

"The move will not affect customers whose ID details are registered with banks and credit institutions," the CBI public relations website quoted Mahramian as saying.

He said relevant regulations had been in place years ago but not enforced because “the CBI needed [more] time to develop the structures.”

Government organizations, namely the National Organization for Civil Registration, Iranian Company Registration Office and the Ministry of Interior helped the CBI to ensure the ID accuracy of bank customers, he said.

Henceforth opening a bank account will be a cumbersome process, including ID confirmation. The procedure was easier in the past because banks, which are far too many, competed for customers, especially those with big money.

In the past two years the CBI announced a series of rules to increase scrutiny of banks and their transactions. This, among other things, is to ensure anti-money laundering measures, curb tax evasion and curtail speculation in financial markets, namely gold and foreign exchange.

The CBI says it is also committed to preventing the unbridled circulation of money in the banking system. Earlier the central bank announced a daily cap for bank transactions of adult clients. The rules came into effect in early 2020 and transactions via inter-bank systems was limited to one billion rials per person per day. Last September it restricted transactions for clients under 18 years of age up to 150 million rials daily.

Amounts Limited

The regulator earlier compartmentalized individual and business accounts. Last February it required individual customers to present documentary evidence for transactions above two billion rials at one bank in one day.

In addition, individual customers should state the reason for their transactions over the threshold when filling out bank forms. They also must “provide documents to prove that the transaction is for a valid business deal, concluding a contract or other acceptable purposes”.

The regulator also set a daily cap of 1 billion rials on transactions by point-of-sale devices and strictly limited the use of POS devices overseas.

According to Mahramain, the payment settlement network,  Shaparak, blocked 4,500 POS machines in use overseas in the past few months.

In collaboration with the Iranian National Tax Administration, the CBI is tightening controls over POS machines to detect dubious transactions and fight tax evasion.

Highlight: In the past two years the CBI has announced a series of rules to increase scrutiny of banks and their transactions. This basically is to ensure anti-money laundering measures are sustained, curb tax evasion and curtail speculation in financial markets, namely gold and foreign exchange

Caption: The CBI says it is also committed to preventing the unbridled circulation of money in the banking system.