Promissory Notes Accepted as Collateral

Accepting promissory notes as non-cash collaterals for foreign exchange loans by banks is permitted, if all the other relating criteria and regulations are adhered to, the Central Bank of Iran announced. As CBI notes, to receive foreign currency debts, banks must obtain sufficient and credible collaterals with a high capacity of being turned into liquidity following their initial confirmation in terms of validity and credibility within the framework of the regulations. Therefore, lenders have been allowed to accept promissory notes as non-cash collaterals for currency commitments (e.g. forex loans, opening forex letters of credit, issuing forex guarantees, etc.) if the forex volume is specifically stated and all other regulations are observed.