Economy, Business And Markets

Councilor Blasts Banks’ Role in Big Constructions

Councilor Blasts Banks’ Role in Big ConstructionsCouncilor Blasts Banks’ Role in Big Constructions

Head of the Environment Committee of Tehran City Council has criticized banks’ increased investment in major building projects in the sprawling capital and warned against environmental degradation due to the increasing illegal constructions in urban areas.

“Tehran environment has fallen victim to the illegal investment of banks,” Muhammad Haghani said, news outlets reported at the weekend.

Banks should contribute to economic development and growth and the “lucrative construction sector is one easy domain” for lenders to make profit because of the low risks and high gain, which in indeed is “contrary to their (banks) legal commitments, the councilor said.

Major banks and lending institutions have in recent years shifted attention to real estate and construction of towers and malls in the form of employers, contractors or shareholders.

The massive constructions are seen as controversial cases of large financial institutions pumping money into big construction projects that have led to complaints from the city council.

Haghani added that the vast volume of building projects financed by banks and their ownership over a considerable amount of immovable property raise on key question. “Are the banks legally permitted to own property and build vast commercial and housing complexes in metropolitan areas?”

The councilor noted that despite legal limitations “banks resort to the people’s deposits to erect buildings in every alley and street in Tehran.”  He added that relevant bodies such as the Law Enforcement Forces, Judiciary and Majlis should collaborate to address the problem by preventing banks and financial institutions from real estate and construction activities as well as revising relevant rules and regulations of the Central Bank of Iran.