Bank Sepah Loses Clients After Cutting Interest Rates
Bank Sepah has lost a considerable amount in deposits since it reduced fixed interest rates on deposits to the levels set by the Central Bank of Iran a couple of months ago.
“Customers have withdrawn nearly 16 trillion rials ($582 million at official exchange rate) from their deposits,” Kamel Taghavi-nejad, the CEO of the bank, said during a press conference in Tehran on Monday morning.
Under CBI regulations, commercial banks and credit institutions are allowed to offer a maximum interest rate of 22 percent on one-year deposits. The minimum rate is 10 percent for other types of deposits.
The CBI announcement came after reports that many lenders across the country offer as high as 27 percent of interest rates. Some experts believe several lenders still offer the high rates in an attempt to attract more capital, despite the new regulations.
CBI officials met with CEOs of banks on Dec. 21, 2014, to reiterate the importance of lowering deposit interest rates.
The CBI persists in doing so in line with lowering inflation, which is expected to fall below 20 percent by the year’s end from last fiscal year’s 34.7 percent.