The minister of industry, mine and trade has devised three scenarios for collecting overdue foreign exchange loans in the form of a plan that has been submitted to the Central Bank of Iran and the Money and Credit Council (MCC), said the chairman of the investment and financing commission of Tehran’s chamber of commerce on Sunday.
The plan, prepared by the ministry of industry in cooperation with private sector professionals, is aimed at helping MCC solve the controversial issue of overdue forex loans – loans paid to businessmen in foreign currency that have not been collected, partly due to the currency shock of the 2011 which happened due to the overnight depreciation of the rial to one third of its value.
The first scenario proposed by the minister, said Mohammad Mehdi Ra’eeszadeh, states that if a debtor pays their whole debt within six months after the approval of this proposal, the debtor will be exempted from late payment penalties, and the foreign exchange rate for loan repayment will be equal to 70 percent of the daily price of the foreign exchange rate at the time of repayment.
In the same scenario, if a debtor chooses to pay their whole debt within a year after the approval of this proposal, again they will be exempted from late payment penalties, while the rate of repayment would be 85 percent of the daily price of the foreign exchange rate at the time of repayment.
The second scenario that could be used as a replacement for the first scenario, said Ra’eeszadeh, is that a debtor can choose to pay their overdue repayments in rial but at the rate of the foreign exchange on the day they had received the loan. However, the interest rate on the loans would be equal to interest rate at the time they received the loan (between 12-16 percent).
In this scenario, if the debtor pays all of their overdue debt within six months after the approval of this proposal, all of the late payment penalties will be annulled.
The third scenario which can simultaneously be used either with the first or the second scenario is that loan repayment can be extended to twice the original repayment period if the debtors seek to pay their overdue repayments within the six months after the approval of the plan, said Ra’eeszadeh.
The Money and Credit Council was recently said to be considering categorization of 5,200 manufacturing companies that have received foreign currency loans without paying it back. The companies were to be categorized according to the type of their activity, the amount of their debt, and the time they received their loans, according to the same report.
The council has not decided upon the rate of foreign exchange in which the debtors will repay their debts, i.e. whether in market prices or the official prices. This has sparked controversy.
