Commercial banks and credit institutions have started providing “weekly” and even “one-hour” loans to their customers as economic hardships have made it hard for domestic business people to remain financially afloat. Critics say applicants must agree to “certain conditions” if they are to receive the loans, which have high interest rates, according to economic news website Eghtesad News. In early March, state-owned banks wrote to the central bank calling for altering the interest rate, which stands at maximum 22 percent for long-term deposits and 27 percent for business loans. No decision has yet been announced on the issue. However, monetary officials have frequently called for lower rates arguing that inflation is hovering at 16 percent and the interest rate must follow it accordingly. The deposit rate ceiling has in many cases been violated by banks and credit institutions that seek to attract more capital. The business loan rate limit has also been violated by some banks to compensate the high cost of money. According to the website, those applying for the expensive time loans mainly include bad debt holders and traders who have financial difficulty to either import goods or clear their shipments.
