Economy, Business And Markets

eBanking Inflicts Loss

eBanking Inflicts Loss
eBanking Inflicts Loss

Banks are suffering losses due to the electronic services they provide as the commissions charged on the services hardly cover 10 percent of the expenses, manager of payment systems of the central bank, Naser Hakimi, said.

“While international electronic banking services yield profits for commercial banks, the same services in Iran result in loss,” he said as reported by ISNA.

“The electronic banking tariffs in Iran are much lower than the international standards, thus it has constantly been suggested that tariffs need to be standardized,” he added.

Central bank officials were of the opinion that users of electronic banking services all need to pitch in to cover parts of the high expenses the bank meant to oblige charging of transaction fees from 1,000 to 1,500 rials per transaction (pending Money and Credit Council final approval) on ‘point-of-sales’ terminal holders as of October 23, 2014.

The plan, however, provoked concern among shop owners and was widely criticized. Its implementation was temporarily suspended so that it could be more thoroughly and technically assessed by the MCC. Now months have passed since the administration first put the MCC on the case but no result has yet been announced.

Central Bank of Iran Governor Valiollah Seif has stated that instead of relying on provision of financial services for revenues, banks must shift their focus on providing technological banking services.

As long as banks concentrate mainly on attracting deposits and providing financial services, they will continue to increase interest rates, consequently interest rates on loans will also escalate, the governor argues. As a result not much of the loans are provided to the manufacturing units; the resources are instead channeled towards speculations which are counterproductive.

The CBI insists that for exiting the current situation and approximating international standards stimulating investment is needed so that the banking system can be updated. By implementing modern services and technologies expenses would reduce and profits increase.