Economy, Business And Markets

Central Bank Oversight Intensifies

Central Bank Oversight IntensifiesCentral Bank Oversight Intensifies

O ver a hundred employees of defunct lender Mizan protested against the credit institution’s closure on Saturday morning.

The protest was held in front of the central bank’s main building on Tehran’s Mirdamad Avenue.

Mizan credit institution was closed down by the Central Bank of Iran due to unlawful practices. Its board and chief executives were arrested for missing a court deadline for repaying the lender’s depositors.

“In the government of prudence and hope, there is no place for imprudence that leads to despair,” the group’s main slogan said, as read in the photos carried by the Eghtesad News website.

Financial institutions mushroomed during former president Mahmoud Ahmadinejad’s tenure, due to an influx of petrodollars, negligent supervision and corruption. Many of the institutions are now being brought under central bank oversight.

The Rouhani administration, especially CBI Governor Valiollah Seif and Economy Minister Ali Tayyebnia, has been slowly tightening the noose around these institutions. They had threatened these institutions through media outlets and warned depositors to withdraw their money from these lenders during the past year (ended March 20).

Protesters were criticizing the central bank’s decision to close Mizan and ax its employees. Less than 10 policemen were at the central bank’s gates during the protest, according to an eyewitness.

Long using a similar logo to the Iranian judiciary, Mizan had many ex-judges listed as its founders. Bank Saderat, the largest lender listed on Tehran Stock Exchange, has taken custody of Mizan’s assets and is handling the reimbursement of the institution’s depositors.

“Mizan’s employees have lost their jobs after 15 years of working for it,” one of the protesters told Eghtesad News.

“We only ask that we keep our jobs,” said another protestor, asking that Mizan be merged with a bank, as it has happened in similar cases.

The central bank first intended to merge Mizan with Saderat, but the deal did not materialize.

Many analysts have criticized the central bank for forcing such defunct institutions on banks.

Such mergers punish the bank’s shareholders, as the overtaking bank’s shares usually dip in value, while rewarding the wrongdoers with financial backing and job security.