The government plans to create special committees in each province to address NPLs or non-performing loans, which are reaching a worrying level, President Hassan Rouhani announced on Tuesday evening, after a meeting with the heads of the judiciary and the parliament.
“The prerequisite for economic growth is to remove existing obstacles that impede businesses in Iran,” Rouhani said about the NPLs which reached 938 trillion rials ($34.1 billion at official exchange rate) in the month ending November 21. The figure shows a 16.2 percent increase compared to last fiscal year ending March 20, 2014.
Due to high NPLs ratio – 14.2 percent – Iranian lenders are struggling to raise resources to provide loans to businesses, many of which are desperately in need of financial aid to shore up their cash flow.
“NPLs are one of the greatest obstacles” on the way of economic growth, the president said, adding that the panels will be tasked with finding solutions that would make debtors of commercial banks to pay back the loans they received.
Given the recent economic downturn, the president noted that some debtors had no intention of not paying their debt. Rather, he added, they came under pressure by harsh depreciation of the rial against all foreign currencies in recent years, among other economic hardships.
The special committees are expected to offer exemptions or discounts in a bid to help debtors be able to pay at least parts of their debts. The judicial system shall also assist the process.
