The CEO of a private bank has denied there is a state of monopoly over money in the country, saying the heterogeneous nature of Iranian banking system makes it impossible for few entities to monopolize the money market.
Kourosh Parvizian, the CEO of Bank Pasargad, said banking services in Iran follows clear rules and regulations like the rest of the world which he says is proof that prevents a monopoly from being established.
“The money market in Iran consists of multiple state-owned and private banks whose very existence is evidence against presence of a monopoly”, Parvizian said in an interview with Eghtesad News website. “These players influence the money market whether they operate legally or illegally”.
Parvizian added that 20% to 25% of money supply in the market comes through “unauthorized financial institutions” that he said are affected by neither the supervision nor the rulings of the Money and Credit Council (affiliated with the central bank).
Contradictions
Parvizain expressed concern that the presence of this “illegal banking network” is creating the impression that there is in fact a monopoly in the money market. “This discrepancy engendered by the rebelliousness of some banks makes it all the more difficult for us to dismiss allegations that our system is plagued by a monopoly”, he maintained.
On the other hand, Parvizian argued, the resistance of some banks in cutting interest rates is “unacceptable” since banks do not have a big stake in lowering deposit rates. He said they should only concern themselves with aspects of rate cuts that hamper the growth of the economy.
He also dismissed the notion that banks deliberately lock in capital in deposits so they can maintain their monopoly, saying that banks adhere to certain criteria in order to increase their capital.
“For state banks to improve their capital they need the approval of the government and private banks have to convince shareholders before raising capital”, the CEO said, adding that in the not too distant past, banks used to finance their projects through their relation with other banks around the world.
