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Banks Face Limits in Boosting Capital

Struggling banks have been told to stop non-banking activities and get rid of excess property to be able to raise capital and increase lending to manufactures and businesses
Banks Face Limits in Boosting Capital Banks Face Limits in Boosting Capital

Banks and credit institutions in Iran are facing a myriad of challenges including cumbersome regulations and technical issues to boost capital through revaluation of their assets, a senior banking official said. 
Farhad Hanifi, the Central Bank of Iran’s deputy for supervisory affairs, said the regulator has “some considerations” when it comes to boosting the capital of banks through asset revaluation, IBENA reported. 
Elaborating the point, Hanifi said assets to be sold cannot be categorized as long-term assets of banks, and as such, cannot be used by lenders to boost capital. 
“In addition, funds for purchasing the assets have been sourced mainly by buying and selling stocks and the deposits with banks. Thus, revaluating assets and showing capital boost in this manner doesn’t appear to be rational.” 

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