Economy, Business And Markets

Gov’t Accounts Shrink as New System Kicks In

Gov’t Accounts Shrink as New System Kicks In  Gov’t Accounts Shrink as New System Kicks In

A few months into the implementation of a plan to move the accounts of the government from agent banks to the Central Bank of Iran, the number of state accounts has drastically decreased.

According to Mohsen Borzouzadeh, director of the Treasury, the descending trajectory will continue.

“When the central core of government accounts is situated inside the CBI, this will streamline liquidity management, promote transparency of government payments and make monitoring easier,” IBENA quoted Borzouzadeh as saying.

In August, the government announced measures to transfer its accounts from agent banks to the Central Bank of Iran in cooperation with the Treasury. 

As the bank of the government, CBI is legally entitled to provide banking services to all public-sector organizations and as per the law, all state bodies should deposit their money at CBI. However, as a result of a lack of proper infrastructure, the bank was forced to move the government’s accounts to a number of agent banks, both government-owned and private.

Referring to the transfer scheme, dubbed Electronic Treasury, Borzouzadeh announced that with its implementation, “[the number of] our accounts have dropped from 250,000 to 69,000 and will reach 45,000 by the end of the current year [March 20]”.

That number, he added, is at the global standard level.

As to how this standard is defined and the number is set, the official said a notice was sent to executive state entities, informing them that they are eligible to have seven accounts. 

On the other hand, he added, another account was considered for the subsets of these entities.

“Eventually and according to the assessments, it was decreed that each executive entity is allowed to have no more than 10 accounts and hence the figure 45,000,” he said.

The Treasury chief noted that under the current scheme, salaries of all government employees are paid simultaneously and on time, which has led to higher employee satisfaction.

According to Borzouzadeh, the scheme has also saved 1 trillion rials ($26.15 million) at the Ministry of Science, Research and Technology and 2 trillion rials ($52.3 million) at the Ministry of Health in costs.

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