Economy, Business And Markets

Iran Budget's Banking Measures Approved

Budget's Banking Measures Approved
Budget's Banking Measures Approved

Lawmakers on Tuesday passed a number of measures related to the banking system and the National Development Fund of Iran while reviewing articles of the fiscal 2018-19 budget.

According to ICANA, the official news portal of the parliament, the first measure pertained to the process of NDFI making deposits with agent banks to be allocated in the form of loans as seen fit by the lenders.

A measure asserting that NDFI "is allowed to deposit 150 trillion rials ($3.06 billion) of its rial resources with agent banks at zero interest rate after gaining the approval of its board of trustees to be allocated as loans" was passed with 169 votes in favor from a total of 232 MPs.

Mohammad Reza Pour-Ebrahimi, the head of Majlis Economic Commission, proposed that new details be added to a previously approved measure that allowed banks to continue for another year their Central Bank of Iran-run scheme aimed at reducing the volume of non-performing loans by forgiving any fine and penalty on loans when the receiver returns the original amount.

Ratified by 136 MPs on Tuesday, only a total of 50 trillion rials ($1.02 billion) worth of loan penalties can be forgiven for every 100 trillion rials ($2.04 billion) of loans.

Three banks are to receive capital buffers as part of the measure approved by lawmakers. Bank Maskan, the agent bank of the housing sector, is to have its capital boosted to 100 trillion rials while the government will be allowed to allocated a respective 20 trillion rials ($408.16 million) and 30 trillion rials ($612.24 million) from the resources of the Central Bank of Iran to increase the capital of the Export Development Bank of Iran and Bank Melli Iran, the nation's largest bank.

Another measure aimed at encouraging manufacturers and clearing what is owed to banks and credit institutions was passed by 186 approving lawmakers.

It decrees that in the next fiscal year to March 2019, if clients of banks from the manufacturing sector clear their liabilities that have come to maturity by the end of the current fiscal year (ending March 20) by the end of the first half of the next fiscal year to Sept. 22, 2018, banks and credit institutions are obligated to receive the original amount and interest on their loans based on the original contract and forego any penalties.

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