Companies and individuals in breach of their financial commitments to banks have started repaying their debts after their names were made public last week, the Economy Minister Ehsan Khandouzi said.
The billions in bad debts indeed “prevented banks from lending in recent years…we are hopeful that disclosing the names of big defaulters would increase banking resources," he said without providing details, IBENA reported.
Khandouzi noted that banks will continue to expose all those who borrowed huge amounts and never paid back. He also said that the ministry is to “launch another initiative next week to improve transparency” of economic sectors.
In a coordinated move by the Economy Ministry, several state and semiprivate banks last week published long lists of companies that had failed to meet major financial commitments over several years.
As per the 2022-23 budget, the CBI is obliged to publicly reveal the names of defaulters and update it on a quarterly basis.
Bank Melli Iran, the largest state-run lender, was the first to publish the list on Saturday and weveral others followed suit. Bank Maskan, Bank Keshavarzi and Post Bank were the three state-owned banks that for the first time exposed the names of defaulters in arrears to the tune of 1 trillion rials ($3.7 million) and above.
Bank Refah Kargaran, Bank of Industry and Mine and the semi-private Tejarat Bank gave their lists on Sunday.
However, most banks that published the names of defaulters said their lists contain only a number of defaulters and by no means is complete. In most cases only the names of borrowers was made public without mentioning the unpaid amounts.
High NPLs have hurt the balance sheets of banks and forced them to stop/suspend lending, despite the chronic need of businesses. This, coupled with other ills have put banks at the center of strong criticism by academia, economic experts and independent business leaders.
CBI data show bad loans reached 2,349 trillion rials ($8.7 billion) by the end of the first half of last fiscal year on Sept. 21.
Some experts, however, also link the high NPLs in part to the defective banking policies, in particular lending rates, saying that due to the huge gap between inflation and interest rates, some companies find it more palatable to delay repayments.
