The Central Bank of Iran has issued a directive on opening bank accounts and issuing debit cards. Per the directive published on its website, the regulator has restricted the number of bank accounts.
“Customers, either individually or jointly, cannot open or hold more than 30 deposit accounts with the banks…This includes various types of accounts namely Qarz-ul-Hasanah (interest-free) deposit accounts, saving accounts, current accounts and short-term investment accounts.”
Restrictions have been imposed on the number of debit cards allowing each financial institution to issue only one debit card for deposit accounts.
Published data has it that more than 145.8 million bank cards were used at least once during the second month of the current fiscal year (started April 21). Debit cards topped the list accounting for 93.63% (136.5 million) of the total active cards.
In the directive, the CBI reflected on challenges in terms of opening deposit accounts and debit cards, namely the lack of requirement for accountholder’s knowledge of opening a deposit account by a lawyer, and not using methods such as sending text messages for verifying applicants’ identity when opening a deposit account.
It mentioned the colossal increase in the number of deposit accounts and bank cards – apparently due to banks demanding customers open another account(s) with the same institution for receiving different types of services.
Henceforth lenders cannot compel customers to open a new deposit account, except in cases where services such as issuing checkbooks, payment cards, checkbooks, interbank check payments, and e-transfers cannot be offered without a new deposit account with the same financial institution.
Banks are obliged to work on implementing and clarifying regulations regarding joint deposit accounts, especially regarding the termination of a shared account.
Financial institutions must set out clear conditions for opening deposit accounts on behalf of others through power of attorney (by lawyers). Banks will stop opening group bank accounts for legal persons.
The CBI has asked banks to develop a process for closing and deactivating surplus deposit accounts and debit cards and inform accountholders about it.
The directive bans transactions for deposit accounts unregistered in the CBI’s Centralized Bank Accounts System and payment cards that are not registered in the MANA system.
The Tokenization Center–also known as MANA– is responsible for changing the form of sensitive data to digital tokens and vice versa. Banks can use their own MANA or outsource it to other authorized bodies, but will be fully responsible for user data security.
Token Guidance System is named SAHAND embedded in the national payment infrastructure. MANA gets access to the payment system through SAHAND. Tokenization is only available through MANA whose technology and implementation process approved by the CBI.
Duty of Banks
As the banking industry adjusts to the new guidelines, it is anticipated that customers may will encounter changes in the procedure for opening deposit accounts and getting debit cards. Financial institutions are encouraged to communicate the changes effectively to customers and provide necessary support and guidance.
Banks have been instructed to exercise utmost caution in upholding anti-money laundering regulations when issuing debit cards. Companies or those with authorized signatures whose names are on the AML blacklist are not eligible for a debit card, the CBI warned.
In recent weeks the regulator has intensified control over bank transactions to curb money laundering and speculative activity in asset markets.
It banned transactions by "unidentified" customers whose IDs were not registered with banks. The restrictions caused problems as banks blocked the accounts of millions of foreigners domiciled in Iran, mostly Afghans.
Earlier in the week the CBI announced rules for issuing payment cards to foreigners living in Iran. Banks can at the most issue one card to adult foreigners 18 years old and above. Foreign cardholders can pay a maximum of 150 million rials a day using the card. The daily transaction limit is for foreigners with temporary residence permits.
