48752
The central bank will be obliged to uphold superior financial reporting standards and publish monthly financial statements.
The central bank will be obliged to uphold superior financial reporting standards and publish monthly financial statements.
  1. Economy
  2. Business And Markets

Bill Proposes Enhanced Central Bank Autonomy

The CBI is recognized as an independent legal entity in the bill, which means that it will not be governed by regulations applying to ministries, government enterprises and affiliated bodies
  1. Economy
  2. Business And Markets

Bill Proposes Enhanced Central Bank Autonomy

The Central Bank Bill is set to improve the regulator's independence in various aspects, said the CBI vice-governor, Ali Akbar Komijani, elaborating on details of the Central Bank Bill and the Banking Reform Bill awaiting parliamentary approval,
“The bill calls for legal independence for the central bank in various aspects, namely organization and structure, budgeting and regulatory affairs,” the CBI website quoted him as saying on Sunday.
The senior official was of the opinion that "The CBI is recognized as an independent legal entity in the bill, which means that the bank will not be governed by the regulations applied to ministries, government enterprises and other bodies.”
The Central Bank Law – first passed in 1972 – was crafted to upgrade and modernize banking regulations. Improving the independence of the CBI, enhancing monetary policy-making and the CBI’s supervision over the money market are among its key goals.
As part of the bill, the CBI would have more authority for setting policies and supervising banks and credit institutions, according to Komijani. “Two separate bodies will be formed: one for setting monetary and banking policies, the other for supervising credit and the functions of financial institutions.”
The new entities will replace the Money and Credit Council, he said, adding that policymaking and supervision need to be separated.”
“The bill demands that members of the two bodies be experts in their own fields.”
Moreover, the CBI is barred from providing financial aid to ministries and other state-owned bodies, he added.
“The CBI will be given more authority in monetary management,” he said, “It would be allowed to introduce a new currency, albeit based on the CBI governor’s proposal and approval of the Economy Ministry."
Credit Ratings
The proposed bill also contains regulations for devising a database for verifying the creditworthiness of bank customers. “International credit rating agencies will be permitted to have access to the database, in line with the national five-year development plans.”
Following successive measure for enhancing transparency of financial operations, the central bank will be obliged to uphold superior financial reporting standards and publish monthly financial statements, Komijani added.
Further on the banking reform bill, the CBI deputy governor said the bill is aimed to meet all the requirements of shariah in banking affairs."
A fiqh council is set to be formed as stipulated in the bill, “in order to make sure all the policies are shariah-compliant,” Komijani said.
“Much effort has been put into eliminating legal loopholes which prevent the CBI from efficient supervision of the banking industry,” he said," like conducting banking operations without CBI license is considered as a criminal act.”
The need for promoting corporate governance has also been urged by  experts and officials in recent years. The bill includes guidelines to clearly distinguish the role of shareholders and executives in the banking system in order to address public concerns and meet international transparency norms, according to Komijani.
The official noted that modifications have been envisaged for improving credit institutions’ legal framework. “We needed more efficient regulations for the operation of credit institutions and the laws concerning their bankruptcy and dysfunction.
Governor’s Role
Based on the bill, the governor of the CBI will be treated as an expert with enough authority for making and implementing monetary and banking policies.
“Decisions made by the central bank have a lasting impact on the society, affecting socio-economic conditions of the country for years to come,” Komijani said. “Therefore central banks should have sufficient authority to make independent decisions based on vision and expertise, as is the case across the world.”
Komijani noted that the CBI would keep using reserve requirement for banks as a tool for implementing policies, “because other common tools are not available for now.”
“However, the minimum reserve requirement has been lowered from 10% to 6% in the proposed bill.”

Short URL : http://goo.gl/AcHPSn
  1. http://goo.gl/4xwSjN
  • http://goo.gl/B2luK1
  • http://goo.gl/0BvxNi
  • http://goo.gl/ZBMlwR
  • http://goo.gl/IFstAm

You can also read ...

Isfahan International Airport, in the central metropolis of Isfahan, is a popular destination among domestic and international travelers.
French construction company Vinci SA has signed a contract with...
Foreign Minister Mohammad Javad Zarif, says legally speaking, Iran has returned to the pre-sanctions era.
As Iran reaps the benefits of sanctions removal and...
Renault Iran Sales Up 161% in Q1
French automaker Renault has registered a rather unprecedented...
Startups Account for 0.8% of  Iran’s GDP
Startups account for 0.8% of Iran’s gross domestic product, the...
KSCO is set to become Iran’s first producer of iron ore pellet with the complete steel production chain at its disposal in one province.
Khorasan Steel Complex’s newly-launched steel plant, with a...
Volkswagen Bemused by Iran Third Party Quotes
Following a denial by a senior Khodro Sazi Sina executive that...
Chabahar will allow India to circumvent Pakistan and access Afghanistan and Central Asia directly via sea.
India’s presence in the strategically located Iranian port of...
PSA Group sales rebound with the introduction of Iran in the sales stream.
French automaker PSA Group in a press release said that the...

Trending

Googleplus