50095
Leasing Firms Oppose Rate Caps
Leasing Firms Oppose Rate Caps

Leasing Firms Oppose Rate Caps

Leasing Firms Oppose Rate Caps

Leasing companies have called on the Central Bank of Iran to stop setting fixed rates for lease contracts, claiming that the rate caps have been causing them considerable losses.
Hadi Moqei, secretary general of National Association of Leasing Companies, said lessors formed the association to represent the industry, as was recommended by the CBI.
“Now we expect the CBI to pay more attention to the industry,” banker.ir quoted him as saying in a meeting of the NALC board members with CBI officials at the weekend.
The association officially started work in March as the sole body representing the industry, following the merger of the former Iran Center for Leasing Companies and the Association of Leasing Companies. The new body was formed with the support of the Central Bank of Iran and the Iran Chamber of Commerce, Industry, Mine and Trade, as a part of CBI plans to regulate the financial markets.
 “We strongly oppose rate caps for lease contracts as it goes against the nature of the leasing industry,” he said, noting that not imposing fixed rates for contracts is the main difference between leasing contracts and other methods of financing.
“By restricting registered leasing firms, the CBI in fact helps expand unofficial operations in the financial market,” Moqei claimed.
Mohammad Kazem, head of Eghtesad Novin leasing firm, noted that imposing undue restrictions on lessors has resulted in the expansion of informal markets, “There used to be 300 leasing companies in Iran, before the central bank started supervising the industry.”
“Now we have 37 registered leasing companies and thousands of companies operating without CBI license,” he said, adding that the development is against the oft-mentioned government plans to promote the much-needed business-friendly climate in Iran.
The lessor added that rivalry from unauthorized lessors has hurt their business to the extent that even with offers of ultra-low rates they are unable to attract customers.
Leasing companies should go through the same procedures required of ordinary citizens seeking loans and credits from the banks.
“Just as the CBI is not allowed to set conditions for goods and services  offered to bank borrowers, by the same token there is no need to set rates for leasing companies,” Kazem said.
EN leasing is affiliated to EN Bank, one of the private lenders.
 VAT and Public Opinion
Majid Partoi, head of Pars Leasing Company, called on the CBI to treat authorized leasing companies as non-banks which would exempt them from value added tax.
 “We have been trying to solve (in vain) the VAT issue for the past seven years,” he complained.
Inefficiency of the VAT system is a major challenge for lessors, forcing them to pay double taxes. This is said to be one of the issues making leasing contracts unattractive to both customers and lessors.
Behzad Qanbari, the head of Bahman Leasing also criticized industries for neglecting the leasing industry’s potential and abilities caused by tight regulations.
“Key industries like the auto sector prefer their own mechanisms for financing their products,” he said, “Automakers’ turnover is higher than all leasing companies.”
“Even the business of a truck dealer has a higher turnover than all the leasing companies put together.”
Bahman Leasing is affiliated to the Bahman Industrial Group, a major automaker.

 Regulators’ Response
Akbar Bolandkerdar, head of CBI’s office for supervising non-bank institutions, confirmed that some of the supervisory tasks of the CBI should be handed to the NALC. “This would result in better decision making and help improve the lessors’ public image.”
Leasing companies are not seen in a positive light by most Iranians largely due to the very high interest rates they charge and the multitude of stringent conditions attached to their contracts that is almost always in the interest of the lessor.
“The NALC can help identify unruly operations in the leasing industry,” he said. “It could also provide consultancy to those wanting to start leasing companies.”

 

Short URL : https://goo.gl/xiBTzu
  1. https://goo.gl/8neVAl
  • https://goo.gl/Y4mr48
  • https://goo.gl/MfkzDU
  • https://goo.gl/CRHYZT
  • https://goo.gl/l47xTr

You can also read ...

Forex Rates Jump After Gov’t Stops Cheap Currency Allocation
Foreign exchange rates in the unofficial market registered...
Int’l Airlines’ Presence in Iran Boosted After JCPOA
A total of 51 foreign airlines are now operating in Iran, up...
Facebook Lures Google Engineer to Head Its Own Chip Development
Facebook Inc. has sent another signal that it is serious about...
US Confiscates 500 Iranian Bitcoins
The US federal government confiscated at least 500 Bitcoins...
Export Billet Prices Increase on Reduced Availability
Iranian export billet prices increased by $5-10 per ton over...
Platform to Promote FATA-IFA Interactions
A new platform has been launched to facilitate interactions...
New MacBook Features Dust-Repelling Keyboard
Apple’s new MacBook Pro keyboards are slightly quieter than...
The private sector completed the construction of 52,081 buildings in H1 2017-18 across all urban areas
The latest data disclosed by the Central Bank of Iran show...

Trending

Googleplus