Economy, Business And Markets

Banks Given Deadline to Meet New CBI Standards

Banks Given Deadline to Meet New CBI StandardsBanks Given Deadline to Meet New CBI Standards

The Central Bank of Iran has ordered all banks to finalize their annual financial statements in accordance with new standards by the end of the current fiscal year (March 20, 2017), said Abbas Kamarei, the director of CBI’s Office for Banking Supervision.

The official noted that the central bank has reduced the number of reforms for banks with satisfactory levels of capital adequacy, “to help them get the task done by the end of the deadline”, Fars News Agency reported on Monday.

 “Since last winter, the CBI has required banks to implement new standards in their financial statements, mainly to boost transparency of banks’ operations, control risk in the banking sector, and [improve] the banks’ capital adequacy levels,” he said.

Noting that the plan is still in the early stages, Kamarei said, “We need to enhance collaboration and coordination between various organizations in the first year of the plan.”

After receiving banks’ financial statements, the CBI will hold meetings with experts, auditors, bank executives and board members of banks to assess the banking sector’s performance, according to Kamarei.

Back in August, the Central Bank of Iran, Ministry of Economic Affairs and Finance, and Iran Audit Organization agreed on the new framework for banks’ financial statements and their audit by regulatory bodies.

Based on the agreement, the financial statements of banks should be prepared in line with the CBI’s new framework notified to them earlier in February.

The new templates have been developed on the basis of International Financial Reporting Standards and in accordance with usury-free banking regulations.

Kamarei hoped that banks' trade suspension in the stock market would soon be resolved, which he added had nothing to do with the upgraded balance sheet of banks.

Since the huge losses racked up by banks became known five months ago, the Securities and Exchange Organization of Iran has suspended 14 banks from trading their share. This is while the suspended shares of only three major privatized banks are worth over 140 trillion rials ($3.57 billion at market exchange rate), which account for roughly 4% of the total value of the equity market.

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