Economy, Business And Markets

Collateral Evaluation System Underway

Collateral Evaluation System UnderwayCollateral Evaluation System Underway

A system designed to report bank loan collaterals will be launched in five months, said Mohammad Jalili, CEO of Customer Credit Evaluation Company.

Designing the system was proposed to complement an existing system, which is used for evaluating customers’ credit ratings, Fars News Agency reported.

Several countries use similar systems for organizing and controlling loan collaterals, the officials said. “The records of all real estate pledged as collateral on a bank loan are registered within the system and can be checked by banks and any other related organization,” he explained.

Currently, lenders are having a hard time finding out if an estate has already been put up as collateral for a loan.

With the implementation of the system, if as an example a specific estate worth 10 billion rials ($360 thousand at official exchange rate) has been pledged for a loan worth one fifth the amount, the remaining worth of the estate will not be blocked and is free to be pledged for another loan if need be.

As the yearend nears, the amount of loans given and the new cases filed for receiving loans naturally decrease, the official said. “Thus, the number of inquiries made by banks and credit institutions on customer credit records through the system has also decreased noticeably.”

The numbers of inquiries, that were nearly 45 thousand per day on average, has decreased to 35 thousand now, he said, adding that the figure will continue to decline the closer we move toward the yearend.