Economy, Business And Markets

Cabinet to Review Banking Reform Bill

Cabinet to Review Banking Reform Bill Cabinet to Review Banking Reform Bill

The banking reform bill prepared by the Central Bank of Iran is to be submitted to the Cabinet for review by the end of this week, Peyman Qorbani, CBI’s vice governor for economic affairs, said on Monday.

The bill seeks to reform the banking system in line with the recent international banking developments.

Iran’s bank-based financial system has been facing serious challenges in the past few years, while it was under external pressure, namely financial sanctions. Tehran and six world powers eventually reached last week a historic deal over Iran’s nuclear energy program, paving the way for the removal of all sanctions. Authorities now seek to restructure the banking system to end the credit crunch and chaos weighing on the business environment.

Earlier this month, President Hassan Rouhani ordered his first deputy Es’haq Jahangiri to help implement banking reforms.

Following the decree, Qorbani said, the CBI put revision of the monetary and banking laws on top of its agenda, Banker news website reported.

“The international banking system has improved much in recent years and introduced so many new financial tools. Electronic banking and supervisory methods have improved too. Many countries have revised their monetary and banking laws and it’s now our turn,” he said.

The bill is said to introduce new tools and bring more transparency to the banking rules. According to Qorbani, sukuk or the Islamic financial tools as well as interbank markets and electronic banking will all be improved.

The bill partly focuses on the central bank and shapes the money market’s policymaking, regulations and oversight. It also redefines banking practices, including lending, credit and Islamic contracts.

The monetary laws are very sensitive and any minor changes could affect the whole banking system; so, several groups have been working in collaboration with the Ministry of Economic Affairs and Finance to finalize the bill.