Business And Markets

CBI Upgrades Credit Instrument Rules

To encourage businesses to use Gam bonds, companies can now apply for credit worth 120% of their sale in the last fiscal year as mentioned in their financial statements, albeit after deducting past outstanding loans
CBI Upgrades Credit Instrument Rules
CBI Upgrades Credit Instrument Rules

The Central Bank of Iran has revised rules guiding trade in “Productive Credit Certificates”, known by its Persian acronym Gam. 
Gam is a market-oriented financial instrument traded in money and capital markets.  Lenders assist credible businesses by offering tradable credit certificates similar to LCs.  The certificate can be given to suppliers of raw materials, machinery and equipment. 
Like bonds, the certificates have maturity dates. The supplier can cash the certificate by selling it in the stock market. 
As per the new guidelines published on the CBI website, the scope of Gam securities has been expanded to include natural and legal entities. Previously, they could be used only for manufacturers and legal entities.


Subscribe to the Financial Tribune to continue reading this article or Log in to your account if you are already a subscriber.

Find out more about our subsciption plans here.

Add new comment