Surplus Property Auctions to Boost Banks’ Capital
Economy, Business And Markets

Surplus Property Auctions to Boost Banks’ Capital

Economy Minister Masoud Karbasian has said the resources required for extending marriage loans will be provided by selling the excess assets of banks through auctions, as their capital has increased by 240 trillion rials ($5.4 billion) in the past few months from this source.
“Banks' capital will continue to increase through the sale of excess properties, as they have agreed to shed 200 trillion rials ($4.5 billion) of their excess assets in an eight-month period,” he added as reported by IBENA.
However, Karbasian notes that banks have only sold excess assets worth 100 trillion rials ($2.25 billion) in the past three years.
Banks’ excess assets mostly accumulated in the form of real estate during the housing boom of 2011-12, which proved to be a bubble that landed in a long-running recession.  
"A committee comprising the Economy Ministry, Central Bank of Iran and Audit Organization of Iran has been formed specifically to receive and evaluate reports of banks shedding their excess assets," he said.
"Bank Melli Iran, Tejarat Bank and Bank Sepah have so far handed in their reports and the rest will follow soon."
Commenting on the government's decision to sell its shares in Asia, Dana and Alborz insurance companies, Karbasian said a few banks had also invested in those firms so they are also putting up their shares for sale.
He noted that President Hassan Rouhani has emphasized that banks should sell their non-profitable branches to improve their capital adequacy ratio.
The minister added that President Rouhani has also urged the banking system to increase the value of marriage loans to 150 million rials ($3,400) from the beginning of the new Iranian year (starting March 21).
“Since President Rouhani’s administration started its second term [in August 2017], more than 550,000 applicants have received marriage loans from agent banks in the country and so the president has ordered banks to increase the loan's ceiling to 150 million rial," Karbasian announced in a national television news program.
The current amount of marriage loans stands at 100 million rials ($2,270) per person with an interest rate of 4%, which has to be repaid in four years. This is while before 2015, the ceiling of marriage loans did not exceed 30 million rials ($6,800) but the loans were interest-free.
He also announced that Bank Melli Iran has signed a monetary agreement with a Turkish bank for exchanging rial and lira.
“Reaching monetary agreements is a time-consuming process but the matter is being followed by the Central Bank of Iran to connect with other countries’ banks,” he added.

Short URL : https://goo.gl/eZ5Pof
  1. https://goo.gl/1H3R16
  • https://goo.gl/YnADW4
  • https://goo.gl/iayfNg
  • https://goo.gl/MBQ9V3
  • https://goo.gl/mEfJme

You can also read ...

US Looking East After Fining Europe Over Iran Business
The US effort to put Iran in a financial bind meant European...
Proses has offered to explore a possible SISP at the world class Mehdiabad zinc (lead and silver) project in Iran where it has a role in development planning.
British mining and mineral processing technology company...
Iran’s Corruption Perceptions Index Improves
Iran’s score based on the Corruption Perceptions Index...
Depending on Iran’s progress in completing its action plan, FATF will take further steps in June 2018.
The Financial Action Task Force has recognized measures taken...
Home Security Startup Taps Face-Recognition Tech
A team of engineers that worked on self-driving cars and...
Crimean Ports Under Sanctions Looking for Way Out to Iran
Crimea’s ports, which are not operating at full capacity due...
SpaceX successfully deployed a satellite into low Earth orbit for the Spanish government.
SpaceX took a critical step Thursday toward making one of Elon...
Qazvin-Rasht Railroad to Come on Stream in 3 Months
The railroad to connect the two Iranian cities of Qazvin and...

Add new comment

Read our comment policy before posting your viewpoints