19839
Torkan Presents Report on Illegal Financial Firms
Economy, Business And Markets

Torkan Presents Report on Illegal Financial Firms

Presidential Advisor Akbar Torkan has criticized the unchecked power of unauthorized financial institutions and the leniency shown toward them.
"According to what is explicitly said in the law, all financial institutions must get permits from the central bank," said Torkan. "But it is unclear how these unauthorized credit institutions are operating, while even a barberry or a kebab shop without a permit would be immediately closed down."
Pointing to the viral spread of illegal financial companies during the tenure of former president Mahmoud Ahmadinejad, Torkan said, "The incumbent government has inherited many bizarre things, one of them being unauthorized institutions that control 20% of money in circulation."
The state of the money market "will not be fixed anytime soon," said the official, adding that banking should be worth 60% to 100% of gross domestic product, but the figure stands at 34%.
"Most of these companies have nothing to do with law or justice, yet one had the audacity to use the scales of justice in its logo," he said, referring to the recently closed down Mizan Credit Institution, whose board were arrested as a result of failure to comply with a court order.

Credit Companies
Out of 7,000 financial institutions operating across the country, more than 6,000 have no operation license from the Central Bank of Iran, according to Hamid Tehranfar, CBI's vice governor for supervision.
The uncertified firms include interest-free credit unions, cooperatives, bureaux de change and leasing firms. Efforts to bring them to heel have been futile, he says.
Apart from the 32 banks doing business in Iran, there are nine large credit institutions operating, only three of which have central bank permits.
Askariye, Tose'e and Kosar are the only credit institutions with authorization to work in Iran's money markets, according to Gholamhossein Mohseni Ejei, the judiciary spokesman. Three of the credit institutions are also in the process of getting permits from the central bank, he said earlier this month.
Tehranfar says Arman and Nour are uncertified firms. The third one may be Mehr Eghtesad Bank, according to media reports.
Based on what Tehranfar and Ejei have said and by examining the major Iranian credit institutions, the three institutions clearly violating the law will be dealt with by the central bank, Eranico website wrote.
"They may suffer the same fate as Mizan, and be closed down. This is something the judiciary has warned recently," the website said.

Cooperatives
According to Ejei, there are 590 unauthorized cooperatives, vastly outnumbering the 145 authorized cooperatives. Expanding supervision over them is happening at a snail's pace–only one is in the process of acquiring an operation permit.
This is despite threats by the judiciary that will confront them in the near future, if they do not heed the warnings.

Leasing Firms
Leasing firms are another important group of firms mainly working without oversight. This is despite their importance and intractions with people. Only 33 are legal and overseen by the central bank.
The judiciary's report shows that 300 leasing firms are working unchecked, endangering public money. The speed of legalization is better in this group compared to cooperatives, 74 of these companies are on the legalization path.

Bureaux de Change
As for the backbone of Iran's foreign exchange market, the bureaux de change are in a chaotic state. Around 1,000 are working without supervision. The scope and dimension of their situation is such that neither the Judiciary nor the central bank has a clear-cut list.
As a key component of Iran's financial system, and due to the importance of foreign exchange, the central bank has sought to limit their unauthorized activities and regulate the foreign exchange market. The bank even reduced the minimum capital needed to get a bureaux de change permit from 20 billion rials ($606,000 at market exchange rate) to four billion rials ($121,000).
So far, 428 bureaux de change have been identified as legal and 300 of them are in the process of becoming authorized.
Additionally, there are 4,000 interest-free credit unions that pose a major challenge to the central bank and the judiciary, as even identifying them is a great task.

 

Short URL : http://goo.gl/eV6OQS

You can also read ...

Italy's Ansaldo Set to Produce Power From Iran's South Pars Gas Flares
Italy's Ansaldo Energia signed a memorandum of understanding...
Fate of Cryptocurrency in Iran Hangs in Balance
Virtual currencies are slowly but steadily gaining traction...
IRISL Returns to the Fold of Int’l Shipping Giants
The Islamic Republic of Iran Shipping Lines plans to replace...
Dairy Exports to Hit $1b
Iran is one of the top milk producers and has ambitious plans...
Money and Credit Council Approves Liquidity Risk Management Rules
Money and Credit Council, a top financial decision-making body...
1st Currency ETF  in the Pipeline
The Iranian capital market’s first foreign currency exchange-...
84% Rise in Rice Imports
More than 1.05 million tons of semi and wholly milled rice...
Iran Insurance Growth at 20%
The collective figure of Iranian insurance companies’ premiums...

Trending

Googleplus