Economy, Business And Markets

CEOs Booted for Interest Rate Abuse

CEOs Booted for Interest Rate AbuseCEOs Booted for Interest Rate Abuse

CEOs of eight commercial banks have been fired for violating central bank’s interest rate directives, said Valiollah Seif, the Central Bank of Iran governor, confirming earlier remarks made by his deputy.

“Interest rates are not supposed to be lowered forcefully, rather, conditions should be so that with the decline in inflation, interest rates are lowered. The central bank is working to provide such conditions,” Seif added.

Hamid Tehranfar, the deputy governor for banking supervision affairs, gave news of the dismissal of the CEOs on the sidelines of a banking conference on January 4. After a series of investigations, a number of executives and board members have been disqualified and dismissed, the official said. “Hereon, the dismissed officials will not be able to hold other banking positions anywhere within the banking system.”

The CBI plans to sort out the affairs surrounding “14 unauthorized credit institutions” by March 20, Seif said recently.

Earlier, central bank officials announced that 7,000 unauthorized credit institutions operate across the country, some of which obtained their permits through the ministry of cooperatives.

The unregulated monetary market accounts for 15 percent of Iran’s financial sector and does not fall under the supervision of the CBI.

The CBI now intends to bring unauthorized institutions into the fold. But if the efforts fail, “the bank will have no choice but to close them down,” he said. “The legal cases for unauthorized institutions are now underway.”