Economy, Business And Markets

Banks Can Undertake Unfinished Projects

Banks Can Undertake Unfinished ProjectsBanks Can Undertake Unfinished Projects

Following a parliamentary approval, the conditions for handing over unfinished development projects to state-owned banks have been made clear for the coming year (starting March 21), IRNA reported.

Reviewing the revenue section of next year's budget bill in an open session held on Tuesday afternoon, issues put forth by the Joint Committee (composed of lawmakers from parliament’s 17 specialized committees as well as members of Budget and Planning Committee) were discussed; and an additional clause was approved by the parliament members.

For increasing capitals of government owned banks, on their request, the government shall be permitted to hand over the possession of unfinished development projects to the commercial lenders, but the maximum value of the projects should not exceed 1 quadrillion rials ($36 billion at official exchange rate) collectively. In addition, the projects' use must be retained and cannot change, according to the report.

The government will not have to finance the project once it hands it over to the bank. Instead, the bank will be held responsible for financing and seeing through the completion of the project according to the set schedule.

Within maximum three years after the completion of the project, the bank shall be required to hand over the project to any of the private or cooperative sectors.

The executive bylaw for this clause shall be proposed by the Central Bank of Iran, the ministry of economic affairs and finance, and the Management and Planning Organization. The cabinet will have a month to approve it.