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 ...

IMF Pledges Continued Work With Central Bank of Iran
More than a week after US Treasury Department blacklisted...
The Sartak-Pishta border gate between the Kurdistan Regional...
Billet Export Prices Increase
Iranian export steel billet prices picked up in the week ended...
More Grain Shipments to Iran
For transport and logistics industry experts, spring is always...
Foiling US Sanctions on Iran: The EU Blocking Regulation
The EU has announced its intention to protect European...
Majlis Forex Options Still on Agenda
Chairman of Majlis Economic Commission said on Tuesday a...
The GDPR clarifies and strengthens existing individual privacy rights.
New European privacy regulations that were to go into effect...
Flooding Inflicts Heavy Damage on Roads
Recent heavy rainfall and flooding in Iran have inflicted...

Add new comment

Read our comment policy before posting your viewpoints