Economy, Business And Markets

CBI, Parliament Working to Resolve Caspian Dilemma

CBI, Parliament Working to Resolve Caspian DilemmaCBI, Parliament Working to Resolve Caspian Dilemma

The Central Bank of Iran and the Iranian Parliament are working closely to resolve the issues surrounding the Caspian credit institution and the overall saga of shadow banks engulfing the informal money market.

With the intensity of the situation growing in the wake of protests by victims of the bankrupt institution, a senior lawmaker said the parliament is reserving its option of referring the case to the judiciary.

“Last year, a number of meetings were held on the illegal institutions and our conclusion was that CBI must present the parliament with a schedule to organize all the institutions,” Mohammad Reza Pour-Ebrahimi, the head of Majlis Economic Commission, was quoted as saying by in a TV interview.

CBI has since submitted a report to the commission, “which was not met with approval”, and therefore the central bank needs to showcase more effective measures.

The official then reiterated that he plans to make good on the letter he sent from the commission to CBI, indicating that “if CBI does not come up with a clear and scheduled plan within the framework of laws and regulations to organize the informal money market by the end of the current week [June 2], the commission will invoke Article 236”.

The article states that if at least 10 members of the parliament or any of its commissions announce that the president, a minister or any officials within their subordinate entities have “not adhered to norms or have violated or refused to implement the law or have executed it incompletely”, proceedings leading to the official’s impeachment can start.

Pour-Ebrahimi said he has confirmed the issue with the parliament that CBI’s performance has been unsatisfactory and if it continues to remain so, the case need to be decided by the judiciary.

However he added that another meeting with top CBI officials will take place next Tuesday to review measures undertaken during the past week. If that meeting does not reach a desirable end, the commission will move to invoke Article 236 which, if approved, will send the case to the judiciary.

On the other hand, CBI Governor Valiollah Seif has also reportedly been in direct contact with the parliament speaker, Ali Larijani.

According to Shahab Naderi, a member of the commission who spoke with Tasnim News Agency, Seif sent a letter to Larijani, which included a full report of CBI’s efforts on taming the unruly credit institutions.

The illegal credit institutions spawned quickly during the tenure of the former administration and according to Pour-Ebrahimi, they currently hold 25% of the country’s liquidity.

Caspian was formed as a result of a merger of eight institutions, namely Mazandaran Farmers, Kermanshah Farmers, Isfahan Hasanat, Mashhad Peyvand, Al-Zahra, Sadr Tous, Omid Jalin and Fereshtegan, to reimburse the depositors.

A few days ago, Peyman Qorbani, CBI’s deputy for supervisory affairs, announced that the long-running case of illegal credit institutions will be closed by the end of the current Iranian year in March 2018.  

Add new comment

Read our comment policy before posting your viewpoints