Economy, Business And Markets

CBI Battling Illicit Lenders Alone

CBI Battling Illicit Lenders AloneCBI Battling Illicit Lenders Alone

The Central Bank of Iran cannot tackle the problem of uncertified financial institutions single-handedly, Ahmad Hatami Yazd, former CEO of Bank Saderat said. He dismissed claims that the CBI is lenient in dealing with the unlicensed  lenders saying that all such institutions have strong links to powerhouses that  grant them protection and some a form of immunity.

“All the quasi-lenders are backed by official or unofficial bodies which frustrate the regulating body’s attempts to monitor (control) them. The high and rising number of the unruly institutions and the fact that they are beyond the realm of oversight has cost our financial and banking sector dearly,” he told ILNA.

Asked about the proper way to crack down on the speculative activities of the lenders, Hatami said the CBI should block their accounts in other banks. “They don’t keep their deposits in a safe. They keep it in bank accounts and those accounts should be closed.”

The former senior banker pointed to Mizan and Samen al-Hojaj as the most recent cases of unauthorized institutions going under and said they have a long history of trouble-making for the economy through speculative ventures and their eventual insolvency. “The unruly credit institutions will continue to create crises in and for the banking system in the next year.”

Pointing to the World Bank’s report about Iran’s banking system, Hatami mentioned that about 5,000 illegal credit institutions operate in the country and refuse to register with any regulating body.

He criticized the founders of such institutions claiming that some have fallen into the ugly habit of abusing sacred religious figures and terms by using their names to camouflage their usurious activities.