Economy, Business And Markets

CBI Official Urges Cash Boost for Banks

CBI Official Urges Cash Boost for Banks CBI Official Urges Cash Boost for Banks

A senior central bank official said on Saturday that commercial banks should be provided with cash if they are to raise capital, rejecting an alternative solution that urges lenders to increase their capital through selling assets in the capital market.

“One of the most important priorities within the Central Bank of Iran is to provide commercial and specialized banks with cash,” said CBI credit manager, Ali Asghar Mirmohammad-Sadeghi.

It is significant for the CBI to help shore up specialized banks such as Bank Keshavarzi (Agriculture Bank), Export Development Bank of Iran, and Bank of Industry and Mine, Banker quoted the official as saying.  

If the economy is to expand, the capital of banks must doubtlessly increase first, he said.

A parliamentary bill for supporting domestic manufacturing also covers the issue and hopefully will be ratified soon, he added.

Although the government is chiefly responsible for providing solutions to increase banks’ capital, the CBI has persistently urged affiliated officials to do their job.

“All practical ideas which could potentially result in an increase of banks’ capital are welcome,” Mirmohammad-Sadeghi noted.

Iranian banks are suffering from a capital shortage as western sanctions imposed on Iran over its nuclear program in recent years have cut the banking system from dozens of billions of dollars in oil revenues blocked overseas.