Increase in the number of uncertified credit and financial institutions over the past six years pose a major challenge to the Central Bank of Iran. The CBI is now determined to curb their growth and organize them within a formal framework.
An official with the bank elaborated on the progress made in its effort to organize the informal money market, the eghtesadnews.com website reported.
On the status of leasing firms, Hamid Reza Azargoun, director of CBI’s Licensing Department said, “The regulator has used all available means to study applications by leasing firms wanting to join the club of certified entities.”
Unofficial statistics by the Center for Leasing Companies estimate the number of active leasing firms at 400, of which only 35 are certified and listed on the official website of the regulator. The majority of these companies are either affiliated to commercial banks or automakers. The remaining have yet to apply for CBI certification.
“The CBI has asked the uncertified leasing firms to submit formal applications through its website,” Azargoun said.
Bureaux de Change
The regulator has also issued permits for 421 bureaux de change so far, the official said adding that “The number of active money changers is, however, much higher.”
Several forex dealers are in the process of receiving permits. The reasons behind delayed registration were cited by the official as the long nature of the process especially when it comes to registering the capital and obtaining written consent from the Law Enforcement Forces on the location of shop.
Unauthorized operation in the foreign exchange market is of two types, he said.
“Some conduct business underground and have no intention to get registered with the regulator. Others have permits but have not renewed it, thereby failing to comply with the new regulations.” The official put the number of the latter at 250.
The CBI has directly communicated the procedure of registration to over 4,000 foreign exchange dealers, of which 1,200 have expressed interest in registration but only 250 have submitted their documents which is being examined by the regulator.
Financial and Credit Institutions
On the progress made in organizing the unlicensed financial institutions, Azargoun said “The majority of credit firms have been merged into 14 cooperatives after the decision made by the regulator in 2010-11. Up until now, ten cooperatives have received permits and the remaining are in the process of registration.”
The official CBI website has listed 174 credit cooperatives and seven interest-free funds, affiliated to commercial banks or financial institutions, as certified.
Meanwhile, the regulator is also considering the applications of four financial and credit institutions that want to be registered with the CBI. Some of the said institutions have to adjust the structure of their shares based on regulations of the Money and Credit Council to be able to receive a permit.
