Economy, Business And Markets

Requests for New Banks Denied

Requests for New Banks DeniedRequests for New Banks Denied

The Central Bank of Iran has received 20 local requests for opening banks, a member of the Iran Chamber of Commerce, Industries and Mine’s board of representatives said.

“CBI has so far rejected requests for new banks; however, we support merging the existing banks to help solve the problem,” the website quoted Masoud Daneshmand as saying.

Issuing operating permits to private lenders by the CBI in the past paved the way for their mushrooming growth and unhealthy competition among themselves for opening branches.

“The CBI should develop a legal framework for merging banks. Measures should be taken to reduce the number of bank branches because the habit of banks opening and closing branches (at their own wish and whim) has become a disturbing trend.”

Daneshmand added that at times banks cook the books to come up with profitable balance sheets to show high profit margins and conceal losses.

“Mergers of banks, insurance firms and other major companies are becoming increasingly common across the world with the aim of promoting their competitiveness and reducing costs,” he said.

Latest figures by the World Bank indicate that about 21,656 bank branches are operating across Iran. According to the CBI’s Supervisory Office, 250 branches were closed last year (ended March 20, 2015) mostly by banks themselves.

Bank Melli with 3,192 branches, Bank Saderat Iran with 2,876, and Bank Keshavarzi with 1,906 have the highest number of branches including in the highly expensive upscale districts of Tehran and other major cities.