Minister of Economic Affairs and Finance Ali Tayyebnia expressed hope that injection of new cash into the banking system in the coming fiscal year (starting March 21, 1016) will help solve the economic woes of the country's industries.
Tayyebnia who was addressing an annual convention at the Bank of Industry and Mine on Wednesday warned against the current "liquidity pressure" on industries and said the sales stall which has entangled the industries should end.
" Raising capital for development banks is more urgent than any other issue in the country and should be seriously considered by policymakers," the minister emphasized.
Tayyebnia called for the concept of the development bank to be scrutinized more closely and said development banks are operating in developed economies by making low-interest loans.
Hailing the work done by Bank of Industry and Mine as a development bank, Tayyebnia said the lender has performed well during the sanctions and hoped that with the removal of sanctions, it will play a more effective role in improving the economy.
"More jobs, economic stability and improved public welfare will be realized when the industrial and mining sectors flourish and Bank of Industry and Mine, carries the mission to finance that sector," Tayyebnia added.
The bank was established shortly after the Islamic Revolution in 1980 by merging four other lending institutions. Its website states the bank's mission as "evaluating industrial and mining projects" for lending purposes and "incentivizing companies and individuals" to invest in industrial and mining ventures, among other things.
Foreign Investment
Also attending the annual ceremony were Mohammad Reza Nematzadeh, minister of industries, mining and trade, and Valiollah Seif, Governor of the Central Bank of Iran.
Nematzadeh called for injecting cash into the Bank of Industry and Mine by "any means", so the bank can enhance its role as the financier of the country's infrastructure programs.
"If we are after monetary discipline and optimal service, the only way forward is to address the woes facing the industries and mines and expand that sector by supporting development banks," Nematzadeh said.
Nematzadeh advocated foreign investment to further stimulate the industrial sector, saying that alongside utilizing the resources of the National Development Bank of Iran and domestic development banks, negotiations with foreign banks should also begin.
"In the next year's budget, banks' revenues should be increased as much as possible–a necessary move for industrial growth."
In remarks praising the bank's financial record, Seif also said the bank's financial record has been "satisfactory". He deemed the bank's operation essential to directing the market's flow of cash toward manufacturing.
Banks have struggled to lend to businesses in recent years due to mammoth government borrowing—as well as non-performing loans that has put the banks' solvency into question.
On a local trip to the southern city of Shiraz on Wednesday, Tayyebnia described the country's banking system as an "ailing entity", submerged in difficulties.
The economy minister announced a government initiative to flood the banking system with oil revenues, saying that a one-time increase in banks' capital, would increase their lending ability by 12 times.
