IRIB News reported that Iranian banks and credit institutions granted 1.1 quadrillion rials ($8.2 billion) in loans to customers, compared with 1.08 trillion rials ($7.9 billion) four months earlier.
Loans offered under the partnership contracts constituted the bulk of this figure, 34.9%, while 5.7% went to Qarzol-Hassaneh (interest-free) loans and 27.2% to installment sale loans.
Installment sales drove the lion’s share of loans given out by commercial banks. The figure stood at 619.5 trillion rials ($5.57 billion), accounting for 34.5% of total credits, compared with 551 trillion rials ($4.06 billion) at the start of the period, according to Financial Tribune.
Commercial banks doled out 137.4 trillion rials ($1.014 billion), or 7.7%, in interest-free loans.
Over half of the total value of loans by specialized banks, 55.6% more precisely, was offered under installment sale contracts. The sum rose to 1,368.3 trillion rials ($10.104 billion) from 1.3 quadrillion rials ($10.067 billion) in mid-April.
Specialized banks registered 410.9 trillion rials ($3.034 billion), or 16.7% of the loans in value terms, under the partnership contract category, with interest-free allotments making up just 2.6% of the loans amounting to 64.2 trillion rials ($474 million).
Non-government banks and credit institutions handed out 45.4% of their loans in the form of partnership contracts.
Iran’s banking industry, which is beset with a currency crisis and a backlog of non-performing debt, is bracing for a set of US sanctions due to take hold on Nov. 4.
The government has replaced some top economic officials, including former governor of the Central Bank of Iran, Valiollah Seif, as part of an attempt to overhaul the ailing banking system.
Seif’s successor, Abdolnasser Hemmati recently urged the banking community to help curb a surfeit of liquidity and support private businesses.
He has also called on banks to assist CBI in resolving the ongoing currency crisis that has seen Iran’s rial lose more than two-thirds of its value.
The need to curb money supply has been underscored by other high-ranking officials, including the Leader Ayatollah Seyyed Ali Khamenei who described the liquidity issue as “a big pain and a very dangerous thing”.