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Credit Institution Defies CBI Decision

Credit Institution Defies CBI DecisionCredit Institution Defies CBI Decision

Tose’e financial and credit institution is offering 22 percent interest on one-month deposits, defying a central bank decision that the maximum rate should only be applied to one-year deposits, Banker reported on Saturday.

The institution has promoted the new plan by a small note on the window of one of its branches in Tehran, calling it Tose’e “22 Plan.”

According to the report, the interest rate in the plan has been introduced by question marks in order to provoke the curiosity of the visitors and drag them inside for enquiring the details.  

The plan offers an interest rate of 22 percent for one-month deposits and the depositors can withdraw the whole amount after one month without any extra fines. The minimum amount to open such an account is one million rials.

Central Bank of Iran sees legal only 10-percent rate of such deposits. Deposit rates range between 10 to 22 percent for sight deposits to one-year deposits, but some authorized or unauthorized banks and financial institutions have in recent years violated the rule offering higher interests in a bid to attract more capitals. CBI officials warned last year that violators of the regulation would face disciplinary measures.

Earlier this month, the CBI issued a directive banning the acceptance and processing of one billion rial checks issued by the Tose’e institution. Reasons behind the CBI’s decision have not been announced yet.

Financialtribune.com