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New Rules Seek Greater Supervision Over Banks

New Rules Seek Greater Supervision Over BanksNew Rules Seek Greater Supervision Over Banks

Banks shall be required to set up special databases that would make it possible for authorities to have a closer look at banking operations, members of the parliament’s economics committee decided on Sunday afternoon.

The MPs added seven new notes to Article 34 of the Monetary and Banking Act, one of which calls on commercial lenders to establish the databases, Mohammad Alipour said on Monday, IRNA reported.

Once the databases are up within the banking system, all transactions can be closely monitored, the lawmaker said. “Providing information transparency, the databases will help authorities restrain financial frauds and embezzlements.”

Another note would require banks to get confirmation from the Money and Credit Council if they are to allocate financial resources to major industrial projects. The move will help the banking system to allocate resources “proportionately to each sector”

Under the new regulations, the financial resources pertaining to interest-free deposits should be separated from the resources going to other sorts of deposits.

Further, MPs approved that only local branches should provide loans for local businesses. In other words, financial resources obtained from a certain city should not be used to provide loans in another. Notwithstanding that the note approved “applies only to cities with populations above 200 thousand.”   

Financialtribune.com