Economy, Business And Markets

Latest CBI Decision on Private Banks ‘Unjustified’

Latest CBI Decision on Private Banks ‘Unjustified’Latest CBI Decision on Private Banks ‘Unjustified’

A recent decision by the Central Bank of Iran for banning acceptance of checks issued by three banks, including Iran Zamin Bank, was made due to negative balances of the private banks, said Kamal Seyedali, the CEO of Iran Zamin.

“The bank has not necessarily breached any laws,” he underlined, describing the regulator’s decision as “unjustified.”

Last week the CBI issued a directive banning the acceptance and processing of checks issued with values over one billion rial ($29,000 at market rate) by the three, Sarmayeh, Iran Zamin and Ayandeh.

The first two are regulated by the CBI, but the third one is not, news agencies reported, citing the directive.

All banking officials had been directed to take the restrictive measures starting January 29, until further notice.

What strikes as odd is that the decision was made only in regards with private banks, and there was not mention of state-owned banks which may breach the banking law, Seyedali noted.

The CEO also expressed hope that the CBI would help the recent limitations on his bank be lifted as soon as possible.

During recent month, reports of illegal activities of banks and credit institutions, some of them even supervised by the CBI, have been widespread. After CBI’s recent directive was released, issues concerning regulator’s monitoring activities have raised concern once more.

The central bank stressed in its statement that it would not accept responsibility for any damages caused by breaching the directive and if any banks circumvent the order or if Checkavak e-check system shows any breaches, they shall be penalized.