The National Development Fund of Iran (NDFI) has warned that it will block bank accounts and seize the property of borrowers to claim unpaid debt, the deputy for legal and parliamentary affairs of the sovereign wealth fund said.
“Even though in the recent past debt collection has picked up, yet due to the [dire] economic and forex conditions, some banks and companies have refused to meet their commitments. For this reason the NDFI has decided recover its money by legal ways,” Fardad Amir Eskandari was quoted by IBENA as saying.
Bank accounts of those who have borrowed and do not repay will be blocked and their assets will be confiscated, Amir Eskandari said, adding that if that amount does not clear the debt, the fund will seize shares of the bank, borrowers and guarantors plus collateral. If necessary, the NDFI will become a partner in or take full ownership of projects for which the loans were taken.
“The NDFI lends to the private sector, cooperatives and non-governmental public economic enterprises through public and private banks. We are not in direct communication with borrowers and interact with banks that apply [to the fund] for the loans, so they must be answerable to us,” he noted.
Forex loans are granted by the NDFI largely to companies and projects that have the ability to export.
“Due to export constraints we agreed to calls by borrowers to repay their debt in the rials at the same forex rates on maturity date or other assets with the same value.”
Defaulting companies for years urged the NDFI to calculate their forex debt either at the rates they had borrowed or at least accept the rial equivalent of the dues.
Most of the forex loans were taken several years ago when currency rates were way lower than today.
Moreover, he added, NDFI can grant or extend grace periods for those projects that are incomplete and/or in progress, provided they repay 50% of the debt. One-year respite or increase in installments will also be considered.
In a recent report, the NDFI said it invested $27 billion in oil, gas and petrochemical sectors, $13 billion in water expansion projects, $5 billion in building and rehabilitating power plants and $1.5 billion in rural employment since its inception in 2011.
“We hope that with borrowers repaying in a timely manner, NDFI resources can be used again for investment and funding economic enterprises.”
NDFI is independent of the government and was created to curb dependency on oil and save a part of the earnings from energy exports for future generations. The sovereign wealth fund has said that it wants to focus more on investment and less on lending.
