Economy, Business And Markets

CBI Overhaul Imminent

CBI Overhaul Imminent CBI Overhaul Imminent

The Central Bank of Iran is introducing new laws to reform the time-worn structure of the financial and economic sectors, Valiollah Seif, the bank's governor said on Monday.  

“The new regulations are included as part of the initiative to revise central bank laws and the Usury-Free Law and are being debated in the relevant CBI departments,” he was quoted as saying by IRNA.

He said the regulator has prepared drafts of the new measures which should be first reviewed by the government and then sent to the Parliament to become law.  

Referring to the implementation of the nuclear agreement between Iran and the six world powers, Seif said “I am rather positive that the new economic landscape will help lift the economy and reinvigorate domestic businesses.”

MCC Overhaul

Seif announced that based on the reform plan the Money and Credit Council will be split into two: one will be tasked with formulating monetary policies while the other will take on a supervisory role.”  

MCC is the highest monetary policymaking body and its members include the CBI governor, the minister of economy and some MPs. The task of supervising banking activities is presently undertaken by the CBI’s banking supervision department.

Credit Card Scheme

The new credit card scheme is the best method to provide finance for manufacturing units, Seif says, and believes that "it will directly connect consumers to the producers."

Late last year the CBI released details of the credit card scheme saying it will be valid for purchasing goods made by domestic manufactures. Later foreign products were also added to the scheme, albeit at a higher interest rate.

The scheme is a part of government stimulus package, unveiled last October, which will provide credit card holders a maximum 100-million-rials ($3,000) at 12% for the purchase of domestically-manufactured goods like home appliances, furniture, carpet, ceramics and tiles. All applicants should be eligible for a payroll deduction.  However, the scheme has attracted the popularity its architects had anticipated.

 Seif pointed to the installment sales scheme launched separately by the Home Appliances Union saying that the government welcomes “schemes that stimulate demand.”

About government plans to provide more loans for cars, intermediate goods and durable goods, he said the CBI is cooperating with Ministry of Industry and Trade to determine the local inventories. “The government has planned to allocate 420 trillion rials ($13.9 billion) to this cause.”