Economy, Business And Markets

MPs Want End to Uncertified Lenders

MPs Want End to Uncertified LendersMPs Want End to Uncertified Lenders

Head of the Parliament’s Social Commission has said that the Central Bank of Iran has the full backing of the Majlis in its efforts to address the formidable and omnipresent problem of uncertified finance and lending institutions.

“All financial institutions must operate within the legal framework set by the Central Bank of Iran. Those who ignore warnings and do not register should await the same fate as Mizan ,” Abdol Reza Azizi said.

The insolvent Mizan Credit Institution which went under in early 2015 had emerged as a major lender attracting huge deposits. But its failure to repay  the unusually large amounts it had splurged on risky ventures on the one hand, and mismanagement on the other, led to its disgrace and downfall.

 The now defunct quasi-lender owes 2.5 trillion rials ($83.5 million) to its customers and has over 2 trillion rials ($66.7 million) in bad loans. Recently,  Bank Saderat announced that it was taking over the discredited money  institution and reimburse  depositors.

Arsalan Fathipour, head of the Parliament’s Economic Commission also complained that the dubious lenders had emerged as a breeding ground for corruption, rent-seeking and money laundering.  The lawmaker urged the people to put their money in law-abiding institutions and banks, IRNA reported.

He recommended the CEOs of uncertified institutions to register with the CBI, put an end to their unhealthy speculative activities and play by the rules.  “It is not acceptable to let these unruly institutions continue their toxic ventures anymore,” he warned without specifying to which powerhouses and vested interests such lending institutions are affiliated.