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ITE is set to promote Iranian financial technology firms in line with the country’s 2025 vision, which projects Iran as the regional hub for financial and banking services
ITE is set to promote Iranian financial technology firms in line with the country’s 2025 vision, which projects Iran as the regional hub for financial and banking services

Majlis Supports Fintech Firms, Experts Call for Currency Reforms

Majlis Supports Fintech Firms, Experts Call for Currency Reforms

Lawmakers will back the promotion of financial technologies and innovations, as they bolster the economy, said Majlis First Deputy Speaker Masoud Pezeshkian.

“Financial technologies allow us to trace abnormal operations in the banking and payment networks. This feature will help us take suitable measures against illegal activities before they turn into major obstacles,” he said during the inaugural ceremony of Iran Transaction Exhibition on Tuesday in Tehran.

“We need to start using data for enhancing financial markets,” he said, adding that the parliament fully backs innovators and bankers in this area.

Iran Transaction Exhibition is being held for the second time. The event aims to provide the private sector and fintech firms with opportunity to showcase their services.

ITE is also set to promote Iranian financial technology firms in line with the country’s 2025 vision, which projects Iran as the regional hub for financial and banking services.

There has been much dispute over the operation of non-bank fintech firms in recent months. Fintech-related bodies are reportedly planning to come together in the coming days to make the final decision about the state of aggregators, probably shutting them down.

Shaparak, an affiliate of the Central Bank of Iran, which is in charge of regulating payment network, announced earlier that it only authorizes fintech firms affiliated with banks or PSPs.

 Nat’l Currency Reforms

Hossein Qazavi, deputy economy minister for banking and insurance affairs, also said bankers should embrace innovative technologies, as “traditional banking is not dynamic enough for today’s world”.

The deputy minister called on lawmakers to take suitable measures for reforming the national currency.

“We need to cut some of the zeros from the national currency,” he said.

“I hope the government and the parliament will revalue Iran’s national currency. It would make daily transactions way too easier.”

Gholamreza Mesbahi-Moqaddam, a member of Expediency Council, also called for the removal of three or four zeros from the rial, to lift the efficiency of Iran’s currency.

Pundits in Iran have welcomed the plan to revalue the currency, saying the measure is imperative under the current circumstances. They mention the expensive conditions of the economy as well as the exorbitant cost of printing money as reasons for removing at least three zeros from the currency.

The Expediency Council member also pointed to the plans for introducing Iran as the financial services hub of the region and said, “The planned framework requires the banking sector to establish links with banks in neighboring countries, mainly through launching joint banks or linking payment networks.”

Mesbahi-Moqaddam noted that enhancing capital adequacy of banks requires fundamental modifications in the banking system, calling for the merger of underperforming banks.

Basel II standards require the minimum acceptable CAR for banks to be 12%, but that ratio is about 4.5% in Iran.

The Central Bank of Iran and the government has been pushing banks to meet the standard capital adequacy ratio (CAR) to make them eligible for reintegration into the global banking system.

The CBI reportedly has merger plans for banks that cannot meet the minimum requirements.

Kourosh Parvizian, the chief executive of Parsian Bank and head of the Association of Private Banks, also welcomed the proposal by saying, “Private lenders welcome acquisition of military-affiliated banks by public-sector banks.”

Parvizian also said his bank has been holding talks with Iraqi banks to link payment networks of the two countries.

“However, the unification of foreign exchange rates is a prerequisite for long-term plans,” he added.

In early October, the CBI said talks are underway with Azerbaijan, Russia, Pakistan and Iraq, and the grounds will soon be prepared for connecting payment networks with the four countries.

 

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