Economy, Business And Markets

Private Sector Outpaces Gov’t in e-Banking

Private Sector Outpaces Gov’t in e-BankingPrivate Sector Outpaces Gov’t in e-Banking

After the end of the Iraqi imposed war on Iran in 1988, the Iranian banking system experienced a new era, when the Central Bank of Iran decided to put an end to traditional banking procedures and started taking steps towards modern and electronic banking.

However, some experts still believe the measures taken in this regard although noticeable, are far from satisfactory, as far as economic development is concerned.

The Forsat Emruz daily interviewed several experts on the status of e-banking in Iran.    

 Building Trust

Jafar Ghaderi, member of the parliament’s budget and planning commission, described the status of e-banking in Iran as being “far from acceptable”, compared to developed countries.  

Calling for further development of e-banking, he said e-banking services can help people save costs and time.

Ghaderi, who believes e-banking is not much favored by average citizens, attributed the problem partly to lack of public trust in e-banking system and its mechanisms.

“Banks needs to enhance public awareness of the mechanisms of e-banking services, via advertisement,” he said, adding that they need to ensure improved security of electronic networks in order to gain people’s trust.

People will be encouraged to use e-banking services, said the official, once they realize that avoiding unnecessary trips to banks will help reduce traffic congestion and consequently air pollution.”

Pointing out to merits of e-banking with regards to trade between domestic and international merchants, Ghaderi said the development of e-banking will help the country attract foreign investment. It will also positively influence the tourism industry, he said, as tourists find e-banking services far easier.

“They will no longer have to worry about carrying cash with them,” said Ghaderi.  

 Facilitation of Trade

Economic expert Mostafa Sharif characterized e-banking as the most significant part of electronic trade, saying that buying and selling of goods via electronic networks is both “efficient and cost-effective,” while at the same time it reduces the cost of production.

In order for the successful development of e-banking, Sharif said that it is necessary to establish competition among public and private banks.

“E-banking must be the characteristic of distinguished and leading banks,” he said.

Public banks still tend to use traditional methods, Sharif said. However, he added that the emergence of private banks in recent years has prompted public banks to update their banking procedures.

“Providing e-banking services requires certain software and hardware as its infrastructure,” said the analyst, calling for the development of the security of e-banking software.

E-banking plays a significant role in the process of globalization, by facilitating trade interactions between countries, he added.

Also, the development of e-banking is good for the economy, he said, “as it helps attract foreign direct investment.” While other factors like relaxed import/export regulations along with imposing no limitations on movement of capital are also involved, “we need to bear in mind that the existence of e-banking is a platform for foreign trade,” he added.