The Central Bank of Iran on Monday set procedures for banks and the tax authority to differentiate the bank accounts of businesses and personal accounts.
The regulator recently instructed banks to separate the accounts that business owners use for their business needs from regular accounts.
Elaborating on the rules, Mostafa Qamari-Vafa, head of the CBI public relations department, said there are various methods for categorizing bank accounts. However, lenders must make certain two conditions before tagging a customer account as business account.
“First the number of deposits going into each account, which must exceed 100 deposits per month. Second, the amount(s), which must be more than 3.5 billion rials per month,” the CBI website quoted Qamari-Vafa as saying.
He reiterated that both conditions must be met simultaneously to be identified as a business account.
“For example, if the deposit is 10 billion rials but the number of deposits is less than 100, the account is categorized as business”.
The criteria for calculating transactions is only the number of “deposit transactions” and not transactions for purchase, money transfer and paying bills.
Even if both conditions are upheld, it doesn’t necessarily render a bank account as business. “The bank should decide on the nature of the account after additional information,” he said without elaborating.
Pasts surveys show that a small percentage, less than 2%, of bank accounts may fall into the business category, the official noted.
Improving Transparency
The CBI says the separation of bank accounts is largely for improving transparency in the economic and financial conditions, which also is in the interest of business owners.
“Higher online money transfer ceilings, easing procedures for issuing checkbooks and the possibility of transferring big amounts without the need to show documents to back such transfers are some of the incentives”, Abouzar Soroush, the CBI deputy for supervisory affairs said last week.
In the past three years the CBI announced rules to improve oversight of banks and their performance. It said the measures, among other things, were to ensure anti-money laundering rules are upheld, curb tax evasion and curtail speculation in financial markets, namely gold and forex.
The regulator long back required bank customers to present documentary evidence for transactions above two billion rials at any one bank in one day.
In addition, customers should state the reason for their transactions over the threshold when filling out bank forms. They must “provide documents to prove that the transaction is for a valid business purpose, concluding a contract or other acceptable purposes”.
The CBI says business accounts would be exempt from such restrictions in the new setup.
Among other things, the rules have been designed to help the tax authority to curb tax evasion via better oversight on bank transactions.
The Iranian National Tax Administration in coordination with the CBI last year decided to connect payment gateways to the national tax system to curb fraud and tax evasion, particularly those in the high-income brackets.
