Capital Market Guarantees Unacceptable

In its latest directive to the banking system, the Central Bank of Iran has obliged all banks and credit institutions to refrain from accepting any kind of guarantees from financial entities active in the capital market and under the supervision of the Securities and Exchange Organization, including brokerage firms. “Based on their statute and the subject of their activities, the aforementioned entities are not allowed to guarantee the debts and commitments of other persons. Doing so has even been banned by the related supervisory entity in many cases,” the monetary regulator stresses in its directive published on its official news portal. The directive also renews CBI’s call on the banking system to only accept credible guarantees that can be transformed into liquidity when allocating loans or accepting new commitments.