Economy, Business And Markets

Parsian Bank Underwrites Insolvent Samen

Parsian Bank Underwrites Insolvent Samen Parsian Bank Underwrites Insolvent Samen

The Central Bank of Iran has confirmed that Bank Parsian is assigned to take over the insolvent financial institution, Samen-al-Hojaj, according to a statement on the CBI website.

Bank Parsian is set to repay the depositors of the insolvent lender by prioritizing small depositors on a timetable developed for the purpose.

“In the first phase, the bank will repay small deposits up to 30 million rials ($1,000), 50 million rials (1,650) and 100 million rials ($3,300) in three stages. Repayment to larger deposits will be addressed at a later stage,” the statement said.

Details of the timetable and names of Parsian branches designated to deal with Samen depositors will be duly announced on the official website of the lender.

The regulator has vowed to continue to regulate uncertified financial and credit cooperatives and institutions until discipline is restored to the money market.

 The Judiciary and other state oversight  bodies are set to support the regulator in the process.

Samen al-Hojaj operated for almost two decades and has 550 branches, twice the number of an average private commercial bank. It was first mentioned by the CBI on its website in 2010 and identified as “in the process of obtaining a license” along with other similar financial institutions. But apparently it never followed up on the certification process and continued doing business without the proper papers as demanded by law.

Heavy investment in real estate and business ventures are said to be the primary reason behind the Samen’s chaotic decline and its failure to meet its financial commitments.

Samen is the second big-name quasi-lender to fall creating new difficulties for the regulator and the banking industry already struggling under the heavy burden of soured and restructured loans.