200 Credit Cooperatives Licensed by CBI
The Central Bank of Iran has issued licenses for 200 credit cooperatives since the beginning of the current Iranian year (started March 20, 2016), CBI’s deputy for supervisory affairs announced on Wednesday.
“The central bank has also finalized the plan for authorizing about 3,000 interest-free funds … Both measures are in line with CBI’s plans to regularize the informal money markets,” Banker.ir also quoted Farshad Heydari as saying.
“CBI’s permission is required for the operation of credit cooperatives,” he added.
As per the law, each credit cooperative should have at least 50 founders and a minimum capital asset of 200 million rials ($7,000) to receive a permit.
Based on a memorandum of understanding signed between the CBI and the Ministry of Cooperatives, Labor and Social Welfare last year, 600 credit cooperatives will be authorized to operate in the money market.
CBI currently issues licenses for leasing companies, exchange operators, interest-free funds, credit cooperatives and credit institutions. About 7,000 financial institutions are active in Iran’s money market and a majority of them are not authorized yet.
Referring to plans for rating domestic banks, Heydari said banks are currently rated according to international standards.
“By rating lenders, CBI seeks to promote a healthy banking sector. Rating helps us quickly recognize problems in banks’ operations,” he said.
The official added that the CBI has informed bank executives of some problems in their operations, giving them some time to address the issues.
Heydari did not provide more details about the outcome of rating procedures.
In early September, Heydari had announced that the rating process for Iranian banks will commence in late October and lenders would be classified into four main groups.
However, later in another statement, he said banks’ rankings would not be made public.
The rating of banks has long been overdue, considering that certain unruly banks and rogue financial institutions had in the past decade disrupted the money market, giving the whole banking system a bad name.
In mid-July, representatives from international rating agencies visited Tehran to begin negotiations regarding the rating of Iranian banks and companies.
At the time, Ali Divandari, the head of Monetary and Banking Research Institute, emphasized the importance of rating by credible international agencies, calling it a prerequisite to normal ties between Iranian and major international banks.