63707
CBI Regulating Informal Money Market
CBI Regulating Informal Money Market

CBI Regulating Informal Money Market

CBI Regulating Informal Money Market

As the Iranian presidential election on May 19 draws closer and the bank-based economy has taken center-stage among candidates and the public alike, the Central Bank of Iran in a statement responded to a number of claims made by candidates that questioned the bank’s performance regarding illegal financial and credit institutions.
CBI touts regularizing credit institutions and cooperatives active in the unofficial money market and preventing the formation and development of illegal entities as one of its major efforts during the four-year tenure of of President Hassan Rouhani, a statement published on the bank’s official website said.
In the past few years, a large number of monetary and credit institutions, namely exchange houses, cooperatives, Qarzol-Hasaneh (interest-free) funds and leasing companies, spawned in the Iranian market in light of a banking system that was disrupted by years of sanctions and international isolation.
These organizations, according to CBI, were required to obtain operation license from entities that were not officially in charge of issuing them, namely the National Jewelry and Gold Union, Ministry of Cooperatives, Labor and Social Welfare and the Police Department.
In some cases, “they would be created without a license from any specific entities to work alongside the banking system in violation of the laws and regulations”.
As the central bank points out, these institutions cropped up between 2009 and 2011–when former president, Mahmoud Ahmadinejad, was in office–with the highest presence witnessed in Khorasan Razavi Province.
They expanded unhindered and set up many more branches throughout the country, which compelled the current administration to deal with the abundant problems created in the banking system and the money market.
In collaboration with the judiciary and law enforcement forces, CBI reports, it managed to reduce the share of illegal money and credit institutions from 20% in the past to less than 10% now that the first term of the incumbent government is coming to an end.

 Putting the House in Order
Four years ago, 11 illegal credit institutions with close to 3,000 branches in the country were reportedly active and expanding at a “disastrous” pace.
CBI reports that it has organized more than 1,000 branches of these institutions that operated without any licenses.
It has prevented the activity of illegal cooperatives such as Samen al-Hojaj and Mizan institutions that had 1,100 illegal branches, and “completely stopped” the expansion of illegal credit institutions’ branches.
While exchange houses without any effective online systems were active and had “created much volatility in the foreign exchange market”, CBI formed the Currency Supervision System (aka Sana) to monitor and identify legal moneychangers and implement oversight on their online transactions.
Furthermore, the activities of Qarzol-Hasaneh funds were shrouded in mystery as no credible information was available about them. More than 3,000 such funds were identified during the tenure of the current government and a databank was formed to organize them.
In conclusion, the statement notes that illegal leasing companies were creating “instability and crisis” in the monetary system of the country, while CBI endeavored to promote the work of legal leasing entities and reduce the share of illegal leasing companies in the money market.  

 

Short URL : https://goo.gl/jcbsgr
  1. https://goo.gl/GaHKU3
  • https://goo.gl/RKJoEU
  • https://goo.gl/uChYv6
  • https://goo.gl/yzQcMe
  • https://goo.gl/ugwrLE

You can also read ...

FAO Forecasts Iran’s Cereal Output to Rise 12% in 2018
Despite autumn dryness, crop conditions recovered in Iran and...
Iran's Summer Box-Office Revenues Exceed $5 Million
Iran’s box-office revenues exceeded 610 billion rials ($5.19...
Hot Autumn for Tehran Stocks
Tehran stocks rose solidly on Sunday, recording another all...
Iran Housing Market Bracing for Double-Dip Recession: Aug-Sep 2018 Report
New data show property deals in Iran are on a downward...
Mobile Internet Services Get Costlier in Iran
Major mobile operators MTN-Irancell and Mobile...
Iran Agrifood Exports Rise 27% to Record High of $2.6 Billion
Around 2.94 million tons of agricultural and food products...
SCI Puts Iran's YOY Inflation at 25.7%
The goods and services Consumer Price Index for the month...
Iran's Trade With Italy Tops $590m
Iran traded 389,963 tons of non-oil commodities worth $594.82...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus