Economy, Business And Markets

Experts Diverge on Uncertified Leasing Firms

Experts Diverge on Uncertified Leasing FirmsExperts Diverge on Uncertified Leasing Firms

Years have passed since leasing firms gained their foothold in Iran. Statistics show that around 600 leasing companies are operating in Iran, but only 32 are under central bank’s supervision. Experts discussed the issue in a televised program on Thursday.

Hassan Sobhani, a university professor and former parliament member, blamed officials at the Money and Credit Council for listing leasing companies as entities that should be supervised by Central Bank of Iran.

“As leasing companies do not function like commercial banks, they must be excluded from the unregulated money market law,” IRNA cited him as saying.

Under the usury-free banking law approved in 1983, the CBI can ban the operation of unauthorized monetary institutions.

Surprisingly, the academic said, “The CBI regards leasing firms as monetary institutions, which is not true as their function is different.”

Hamid Tehranfar, CBI’s deputy governor who joined the debate by phone, said even under the current law the CBI is only responsible for supervision over “legal” institutions and leasing firms, and not the illegal ones.

He added that the police force is responsible for identifying illegal companies. “If the CBI identifies one, it should inform the Law Enforcement Forces to act against it, a process that frequently happened in the past,” he added.

But General Mohammad Reza Moghimi, head of Iran’s police force, who was also speaking on the phone, insisted that the CBI is in charge of financial and credit institutions through careful supervision and that the police can only help the regulator in this regard.

“In case of any complaint against unauthorized institutions, the judicial branch would issue a warrant for bringing offenders to court, a process that requires collaboration among the CBI, judicial branch and the police,” he stated, noting that police has managed to crack down on 25 unauthorized institutions over the past few years.

In response to the general, Deputy Attorney General Morteza Bakhtiari said police do not need a warrant to act against illegal institutions, referring to the first clause of the first article of the unregulated money market law.

However, Bakhtiari emphasized that CBI is responsible for supervising both certified and uncertified credit institutions and leasing firms.