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EghtesadOnline: Iran's economy does not have the capacity for so many banks and credit institutions and hence the idea of merging them should be considered, the head of Iran Chamber of Commerce, Industry, Mines and Agriculture said during the last meeting of ICCIMA in the current Iranian year (ending March 20).

"One of the reasons for the high cost of funds could be the existence of so many banks and credit institutions," Gholamhossein Shafei was also quoted as saying by Banker.ir.

According to the latest report of the Central Bank of Iran, there are 35 banks and credit institutions with 21,656 branches across the country.    

Shafei said the economy is grappling with lack of resources and investments, noting that "the wrong priority in decision-making influenced by the interference of vested interests" is the bane of the economy, Financial Tribune reported.

"The root problem is not the lack of resources but their wrong distribution," he added.

The ICCIMA chief regretted that the production sector is unprofitable while speculative activities give high returns.

"We need to look at the production sector from a different angle and direct the flow of resources toward it since the strength and safety of our country depend on economic growth," he said.

Shafei noted that the private sector welcomes disinflationary policies but is worried that the government may use liquidity to trigger a short-term boom in the economy.

"The looming issue is liquidity pressure, if resources end up somewhere other than the production sector," he said.

Addressing policymakers, Shafei said ordinary decisions cannot change an extraordinary situation.

Iran Banking Gholamhossein Shafei Iran banks Iran banking mergers ICCIMA