The CBI warned that banks found in breach will see their branches shut, codes deactivated and restrictions on their physical expansion, balance sheets and credit plus permission to offer forex services.
The Central Bank of Iran on Wednesday warned banks and credit institutions to uphold the newly-set interest rates on deposits or face prosecution.
In a notice seen on the CBI website, the regulator said despite earlier warnings its investigations found that some banks resort to dubious ways to attract big money by offering higher rates on deposits and outdo other lenders.
Some state-owned lenders are offering higher rates even though the CBI has not publicly approved the increase, media reports said Monday.