Economy, Business And Markets

CBI Supports Return of Int’l Credit Cards

CBI Supports Return  of Int’l Credit CardsCBI Supports Return  of Int’l Credit Cards

Governor of the Central Bank of Iran Valiollah Seif has recommended Iranian banks to brace themselves for reengaging with international business, namely through embracing international standards.

Speaking at the second gathering of “Banking in the Joint Comprehensive Plan of Action” committee late Saturday, he told senior bank officials that Swiss banks are  prepared to reopen Iranian bank accounts even before the lifting of  sanctions,” CBI’s Public Relations Office quoted him as saying.

Following Seif’s remarks, Gholamali Kamyab, his deputy for foreign exchange affairs pointed to the [demand for] international payment systems like Visa and MasterCard saying “Iranians need such services and banks should enter the field in line with CBI regulations.”

The CBI formed a regulatory committee last month to supervise banking in the JCPOA drafted by Iran and the six world powers in July to put an end to Tehran’s nuclear file and the related sanctions.  The committee aims to address potential problems for the Iranian banking industry which may occur when sanctions relief are implemented.

Seif highlighted the role of a “supervisory and adjustment department” in banks, saying it would be helpful for developing management systems, training  staff and task allocation. “Such units are necessary as they promote transparency in banking.”

Kamyab also discussed the opportunities and requirements for Iranian banks to re-link with international banking. He welcomed the prospect of banks reopening their overseas branches as a provision of the long-awaited nuclear agreement.

Echoing Seif’s remarks in defense of  the need for the “supervisory and adjustment department”  Kamyab considered it to be an indispensible part of banks’ overseas branches as it helps them incorporate the developments in related areas  such as money laundering, capital adequacy, internal audit and  check terrorism funding.

He exhorted the banks to create their own internal committees to deal with the impacts of the nuclear deal on the domestic banking sector.

 Rate Cutting

CBI is also trying to cut interest rates in an attempt to finally synchronize it with the inflation rate in the second half of the current fiscal year (started March 21).

Speaking on the sidelines of a conference on “Transportation & Urban Development Investment Opportunities,” Seif referred to the role and significance of a functional policy in stabilizing interest rates. “Our policy is to employ indirect instruments to adjust interest rates with the inflation rate, hopefully by the yearend,” ISNA quoted him as saying on Saturday.

He noted that indirect measures such as entering non-banking financial markets are instrumental for CBI in easing financial pressures, helping the process of lowering interest rates and fostering growth. Synchronizing interest rates with inflation rate would also put tabs on the monetary base and promote domestic production, the governor noted.

Regarding the failure of lenders and banks to meet the interest rate ceiling set by the CBI, he said unauthorized financial organizations and uncertified quasi-lenders in the informal money market have undermined efforts of commercial banks in upholding the rules.

 “Nevertheless, the conduct and performance of banks will be thoroughly monitored by the CBI and irregularities will be subject to prosecution.”

The top banker referred to some unlicensed bureaux de change that committed fraud by deceiving unsuspecting individuals and stressed financial transactions such as foreign currency dealings should be carried out through official and authorized channels.  

He announced Bank Maskan’s proposed to raise the mortgage ceiling to around one billion rials ($ 33,000) which would be granted under conditions and enable builders to also transfer part of the mortgage to homebuyers after completing the project.