Economy, Business And Markets

Lawmakers Censure Credit Card Scheme

Lawmakers Censure Credit Card SchemeLawmakers Censure Credit Card Scheme

Lawmakers have criticized the government’s credit card scheme blaming the measure for the recent surge in the prices of two foreign brands of home appliances.

 Following reports of 6% - 8% surge in the prices of LG and Samsung home appliances, Omid Karimian, a member of economic affairs commission of the Parliament called on the government to “define a mechanism to prevent excessive jumps in prices of basic commodities that he claimed has led to discontent among the public, Eghtesad news website reported.

He warned that the powerful Majlis commission “is ready to look into the case.”

Meanwhile, the head of Home Appliances Association rejected the price rise reports saying “Only some new products of Samsung posted increase in prices.”

 Rohollah Beigi, vice-chairman of the economic commission also regretted that weak planning of the scheme from the outset created the grounds for foreign companies to sell their products on “installment basis” as consumers are reluctant to buy Iran-made products because they too are covered by the new credit card scheme.

He noted that the average Producer Price Index is around 8% and any further increase would require closer scrutiny.

 Mohsen Sarami Foroushani, another lawmaker and member of the commission voiced concern over the likely inflationary impact of credit cards and said, “The scheme will trigger inflation and give rise to speculators and middlemen.”

He added that the “Parliament is not responsible for monitoring prices but will take relevant supervisory action if needed.”

In early December 2015 the Central Bank of Iran released details of the credit card scheme. The scheme is a part of the government’s incentive package, unveiled last October, to help domestic manufacturers reduce inventories and promote consumer spending.