A review of data published by the bank on its website as part of its monthly analyses of the monetary and banking sector indicates a gradual and continuing trend based on which people are increasingly ditching short-term deposit contracts in favor of long-term deals.
CBI announced on Aug. 23, 2017, that as of Sept. 2, all banks and credit institutions are obligated to refrain from paying high interests on their deposits and cap the interests on one-year deposits at 15% while paying a maximum of 10% on short-term deposits.
According to CBI figures, by Oct. 22, time deposits rose in volume by more than 1.39 quadrillion rials ($33.09 billion) from the beginning of the year, but that was largely due to the more than 2.03 quadrillion rials ($48.33 billion) in long-term deposits because short-term deposits contracted notably, Financial Tribune reported.
By the end of the eighth month to Nov. 21, short-term deposits registered an eight-month decline of 12.2% while long-term deposits increased by 45.1%.
When the ninth month ended on Dec. 21, short-term deposits contracted by 12.9% compared with the start of the year, while long-term deposits grew by 48.9%.
By Jan. 20, which marked the end of the following month, short-term deposits had signaled another 10-month decline to reach13.7% while long-term deposits rose by 51.8%.
The latest report published by CBI, which registers data up until Feb. 19 that marks the end of the 11th month of the previous year, shows short-term deposits rose following a 16.4% loss in 11 months while long-term deposits strengthened with a 58.4% increase.
The CBI data also show that more than 1.95 quadrillion rials ($46.42 billion) in time deposits were attracted by the banking system, registering a 22.4% year-on-year increase. The figure resulted from an increase of 2.82 quadrillion rials ($67.14 billion) in long-term deposits and a contraction worth 867 trillion rials ($20.64 billion) in short-term deposits.