The Central Bank of Iran said it will prevent big defaulters in the past from receiving new loans.
“Big defaulters will not receive new loans and must first reimburse past loans under the set timeframe,” Mostafa Qamari-Vafa, head of the CBI public relations department said, IBENA reported.
Qamari-Vafa warned lenders who have given “huge loans in the past to their affiliated entities”. He said they will face disciplinary measures.
The CBI earlier said that in the absence of robust supervision and lack of an integrated data bank in the past, banks gave unusually big loans without proper collateral. Over the years, such bizarre lending resulted in large NPLs undermining the role and viability of many banks.
To improve oversight on lending the regulator has designed a system that accesses data banks and allows direct interaction among bank branches, sharing customer data and help lenders better monitor the eligibility of loan applicants.
Dubbed “Samat”, the system gives banks online access to data about borrowers profile, issued bank guarantees and outstanding debts.
The system is touted to increase transparency in lending and help cut risks to banks. Commending the role of Samat in restoring much-needed discipline to lending, Mostafa Qamari-Vafa said the platform automatically removes unruly borrowers from the lending process.
Samat updates the creditworthiness of customers on a daily basis and relays data to banks across the country. Under the new arrangement, banks disqualify defaulters even if they put up proper collateral but failed to repay past debts in a timely manner.
The CBI recently obliged banks to concentrate on the credit rating of customers and make thorough inquiries of loan applicants before lending.
Credibility assessment covers many factors. According to Mahboub Sadeqi, head of the CBI’s Banking Information Department, record of past loans, borrowers’ check transactions and even their performance in paying traffic fines and utility bills in a timely manner are among the criteria.
Creditworthiness has become a key issue because an increasing number of big defaulters has led to the emergence of unhealthy and troubled banks.
The CBI recently published the name of big borrowers in the hope of recovering billions of bad debt.
