The Iranian ministers of industry and finance have called on commercial banks to resume the opening of letters of credit (LCs) for domestic use, Eghtesad News reported. Mohammad-Mahdi Raeeszadeh, head of Tehran’s Chamber of Commerce Investment Committee, said on Tuesday that a specialized workgroup comprising representatives from the two ministries, the private sector and the central bank, was formed to attend to the issue.It has been settled that banks should reduce collateral rates for opening LCs. In 2013, the central bank banned the opening of LCs after reports of financial frauds. Banks used to receive collaterals worth 110-175 percent the amount the LC. “Banks have to set the limits on LC collaterals depending on customers’ credit scores,” the official said.
