Economy, Business And Markets

Banks to Self-Regulate Interest Rates

Banks to Self-Regulate Interest RatesBanks to Self-Regulate Interest Rates

Self-regulatory measures for supervising interest rates are among the banking industry’s priorities, Abdol Nasser Hemmati, head of the state-owned Banks’ Coordination Council said Monday.

During a recent meeting of the CEOs of banks -- which resulted in another cut in interest rates -- some of his colleagues proposed lowering one-year deposit rates to 18% or 17% from the current 20% set by Money and Credit Council in April.

He added that another group of bankers, however, insisted on a more strict supervision over the implementation of existing rates instead of going for another cut.

“Finally the bankers unanimous in agreeing to abide by the current rules and regulations from November 22 in order to prepare the ground for an ultimate move to rates around 18% which are more in sync with the inflation rate. The Supervision Committee of state-owned banks and the Association of Private Banks will work with the CBI to monitor the banks’ activities in relation to the deposit rates.” he was quoted as saying by

Hemmati also pointed to the gradual cuts in inter-bank interest rates, saying that bank officials had agreed on 24% as the ceiling for inter-bank rates.