Economy, Business And Markets

Gov’t to Raise Capital of State Banks

Gov’t to Raise Capital of State Banks
Gov’t to Raise Capital of State Banks

The government has said it is seriously considering raising the capital of state-owned banks, according to the minister of economic affairs and finance.

Increasing the capital of public banks is part of the freshly conceived 'economic plan of action to exit recession', said Ali Tayebnia, which can significantly improve the performance of banks once the parliament approves the plan.

In the general assembly meeting of Bank Melli Iran that was held in the In the Bank Melli's Museum Building in central Tehran, Tayebnia underlined the necessity of transferring the bank's surplus assets, saying that retrieval of overdue loans will enable the bank to enhance its lending power.        

The minister of industry, mine and trade Mohammad Reza Ne’mat Zadeh and the governor of the Central Bank of Iran, Valiollah Seif were other participants in the meeting, which was held to examine and approve the financial statements of Bank Melli for the past Iranian year (ended March 20, 2014).

Elsewhere in the meeting, Ne’matzadeh called for increasing the revenue of state-owned banks via closing loss-making branches and placement of ATM machines in good locations.

He also called for further examination of state-owned banks charters and underlined the importance of renewing the services offered by Bank Melli.

The CBI governor said the government is keen to support public banks via increasing their capital. Underlining the importance of revising bank charters, Seif too said it is necessary to shut down inefficient bank branches, and take action to collect overdue loans.

Bank Melli needs to rely on the fees it charges for its services, as a source of revenue, Seif asserted.