A member of the parliament’s budget and planning committee has voiced his discontent with the way banks are currently conducting business.
In an interview with IRNA, Jafar Ghaderi, an MP from the southern city of Shiraz, said that banks have strayed from their designated roles as financial firms and have in effect become profitable entities.
He largely ascribed the current disarray in banking affairs to “laxity of regulation.”
“If banks continue to keep the status quo and continue their lives as mere enterprises, they will fail to build up capital and as a result lose face and validity in global transactions,” Ghaderi warned.
Ultimatum
Ghaderi referred to a recent vote in the parliament on a plan to exit recession, saying that the law calls for an increase in the banks’ reserves as well as a formula to remove hurdles in the way of manufacturing.
“The approval of the non-inflationary recovery act by the parliament is a big step forward in promoting manufacturing, fulfilling the goals of a ‘resistance economy’ and staying in tune with the government’s policies for sustainable recovery,” he said.
Ghaderi added that a main feature of the recovery plan, which has the confirmation of 63 MPs, is a decree to banks and financial institutions to transform their assets into capital.
He announced other measures to inject money into the banking system including provisions to facilitate banks’ access to the National Development Fund’s resources and to repay government’s massive debt to commercial banks.
“The bill also requires banks to relinquish a minimum of 33% of their movable and immovable property and of their affiliated firms at the discretion of the Money and Credit Council,” Ghaderi said.
He further urged the banks to hand over all their non-banking ventures with the exception of unfinished development projects they are dealing with. He clarified that “bank-affiliated firms” refer to businesses with more than 50% of their shares owned by banks.
Promoting Manufacturing
Ghaderi also revealed a proposal to set up a committee comprised of 13 ranking officials including cabinet members, parliamentarians and judicial authorities to step up support for domestic production.
The committee, he said, would convene to work out remedies for problems obstructing the path of production, offering loans to manufacturers and granting loan extensions to entrepreneurs indebted to banks.
