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Bank Melli Iran became the first lender on Monday to announce the measures.
Bank Melli Iran became the first lender on Monday to announce the measures.
  1. Economy
  2. Business And Markets

Penalty Waiver for Bank Debtors

  1. Economy
  2. Business And Markets

Penalty Waiver for Bank Debtors

The Coordination Council of Public-Sector Banks announced on Sunday it will waive late payment penalties for those who repay their loans by the end of the Iranian year on March 20.
Alireza Qeitasi, the council’s secretary, said the measure is in line with Majlis plans for removing the production sector’s hurdles and "aims to promote the banking sector and increase the bank's role in boosting employment in the country”, IBENA reported.
The official added that the measure includes all debtors [irrespective of the amount owed].
Bank Melli Iran became the first lender on Monday to announce the measures.
Back in September, Majlis Speaker Ali Larijani asked bankers to set easier repayment terms for debtors and waive fines for late loan repayment, especially for creditworthy customers, noting that regulations allow the banking sector to ease loan terms.
Valiollah Seif, Central Bank of Iran’s governor, on Sunday announced that the ratio of non-performing loans in Iran’s banking sector stood at 11% by September 20, down from 13.6% in September 20, 2014. However, he called on bankers to continue taking calculated measures “until the ratio reaches the 5% goal”.
The top banker required lenders to revise their methods of assessing applicants’ creditworthiness along with an efficient mechanism for supervising the implementation of reforms in all their units and branches, mainly to prevent the growth of bad debts in the key banking sector.
It was reported that the NPLs of banks have more than quadrupled from 204.87 trillion rials ($6.4 billion) in 2007 to 863.42 trillion rials ($27.1 billion) in 2015. Banks have recovered 203 trillion rials ($6.3 billion) of their non-performing loans in the past three years.
The government has repeatedly warned bad debtors of strict measures if they do not immediately repay their debts to the banking system.
Judiciary Spokesman Gholamhossein Mohseni Ejei this week announced that it has arrested three major debtors. They collectively owe about 30 trillion rials ($762 million at the market exchange rate) to the banking sector.

 

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