• Business And Markets

    Iran's Central Bank Bans POS Devices Overseas

    As part of efforts by the Central Bank of Iran to crack down on capital flight which the banks partly blame for the currency market volatility, the CBI is enforcing its decision to ban all Iranian POS machines operating abroad. 

    According to IBENA, a news website affiliated to the CBI, the ban has been notified by the CBI and its affiliate company Electronic Card Payment Network System (Shaparak). 

    CBI Governor Abdolnaser Hemmati had earlier criticized the existence of POS devices in neighboring countries such as Iraq and Afghaniastan as well as in western countries that have large Iranian diaspora like Canada, saying that currency trade by exchange bureaux in those countries is causing capital flight. 

    Since taking office last July, Hemmati has tried to calm the currency market especially by curbing the demand side. As an early move, the CBI issued a directive in December telling banks and credit institutions to abide by its restrictions on payment ceilings. 

    The directive allowed a maximum 500 million rials in daily transaction for a single debit card and up to 1 billion rials for any national ID number.  In other words, each card holder is allowed to purchase maximum 1 billion rials via POS devices with their debt cards. 

    Akbar Komijani, the CBI deputy chief, said earlier this month the restrictions were successful in curbing speculative activities in the forex market. Despite the efforts however, the USD rate shot up 30% in the open market in two months to Feb.19. 

    The bank has also ditched the overnight interest payment on deposits in favor of monthly rates to discourage depositors from speculative trade in foreign currencies. 

    Mehdi Toubaei, deputy for development and supervisory affairs at Shaparak told IBENA that if foreign POS machines also use Iranian IP addresses they will be blocked.

    "Shaparak and electronic payment systems will even track devices that use Virtual Private Network to alter their IP address to Iran and block them," Toubaei warned.