Iran’s office to Fight Economic Corruption has instructed the Central Bank of Iran (CBI) to set up a working group to specifically address non-performing loans and penalize faulty individuals, a CBI official announced.
The office is determined to prevent and fight against corruption, a phenomenon the Iranian economy has been increasingly suffering from in the past decade.
To that end, various organizations report the corruption cases to the office, where they are investigated and violators would be penalized, Mahmoud Ahmadi, CBI’s secretary general, said during a televised program on Monday.
Many Iranian banks are near insolvency. Put together, major lenders have at least $938 trillion rials ($33 billion at official exchange rate) of bad debt on their balance sheets, a horrifying figure when considering that total lending stood at 3.2 quadrillion rials ($112.8 billion) during the year which ended March 20, 2015. Yet, the figure is an understatement, as banks reschedule the due date of the loans to make records look healthier. The real amount of non-performing loans is likely to be double the official figure based on estimates by the economy minister and presidential aides.
Another issue is petty fraud via bank checks, which was on the rise and at alarming levels.
The central bank is trying to solve this problem by using Chekavak electronic check management system, which went operational nationwide before the start of the new Iranian year, which began March 21.
The official also regretted that “in the past 5 years, the number of bounced checks has worsened hitting 27 million,” saying that the headquarters has taken measures since last year to stop fraudulent activities regarding checks.”
Launching Chekavak in 20,000 branches and training 100,000 bank clerks parallel to the old system has been a big achievement for the banking system.
