Iranian lawmakers have passed a proposal that would require the Central Bank of Iran (CBI) help provide financing for the cash flow problem facing industrial, mining, agricultural, and transportation sectors as well as manufacturing guilds, knowledge-based institutions, and export companies.
The CBI is now expected to create a special bank account solely for the purpose of providing cash flow.
According to Fars News Agency, a separate bank account shall be created for each sector, in which they will be required to deposit all or parts of their revenues. The savings can later be used for the unit’s legal payments. That does not meant that the units would not be able to hold other accounts within the banking system.
Initially, businesses are required to deposit 60% of their average sales in the course of three years and the amount shall be approved by the Iranian National Tax Administration. The maximum amount of deposits has been set at 500 billion rials ($18.5 million at official exchange rate). Deposit amounts for following years will be calculated according to CBI’s guidelines and proportionate to the units’ yearly sales.
Loans for Agro Sector
Furthermore, all unspecialized banks have been mandated to provide loans for the agriculture sector. So far Bank Keshavarzi (Agriculture Bank) has officially been involved in financially assisting the agro sector.
According to legislation, all lenders will have to aid the agriculture sector in form of loans, depending on the latest statistics available on gross domestic production (GDP).
Under the new law, the Money and Credit Council (MCC) and the CBI will be required to communicate the new regulations to all commercial banks within three months.
The CBI will also be expected to submit the banks’ six month performance reports to the parliament’s agriculture, water, and natural resources committee, ISNA reported.
Within a year, the government shall have to take the necessary measures to establish a database, through which all manufacturing agricultural units and their product yield can be clearly identified. Furthermore, with the establishment of the database, subsidy payments can be provided to all agriculture units in need of financial support.
Additionally, in line with laws for increasing agricultural efficiency, the government is permitted to provide the funds it needs, through commercial banks, to pay insurance subsidies and aid in grants for the agriculture and livestock sectors.
