EghtesadOnline: A quartet of major regulatory bodies will form a task force to resolve the controversy surrounding banks' financial statements, secretary of the Association of Private Banks and Credit Institutions announced on Saturday.
Mohammad Reza Jamshidi added that the task force will comprise representatives of the Security and Exchange Organization, Audit Organization of Iran, the Central Bank of Iran and the Iranian National Tax Administration as well as banks, IBENA reported.
"Representatives from these bodies will form a task force and discuss how to approach banks' financial statements according to standards set by these entities so that problems surrounding these statements are resolved," he said.
Jamshidi made the announcement after a yearend meeting of banks' chief executives to discuss the urgent issues facing the Iranian banking system that bears the lion's share of the country's financing burden, according to Financial Tribune.
The row over how lenders should prepare their financial statements has been brewing ever since CBI sought to reform balance sheets before the implementation of the nuclear deal in January 2016 based on the International Financial Reporting Standards.
The move met with the immediate resistance of some banks and their shareholders as well as some experts who argued that banks are not simply prepared to undergo drastic changes after years of sanctions had cut them off from the international financial system.
The dispute largely concerned AOI and CBI, both of which stake a claim for setting financial reporting standards and auditing banking practices.
Last year, Minister of Economic Affairs and Finance Masoud Karbasian and CBI Governor Valiollah Seif signed a directive regarding bank balance sheets, which was expected to finally end the dispute over who gets to set the financial reporting standards.
This had led to the chaotic situation–persisting to this day–where several banks are unable to hold their shareholder's annual general meetings on time, leading to a trading halt of their shares on the stock market.
The fact was that the new balance sheets had laid bare the critical status of many Iranian banks that have been wrestling with chronic problems such as rising bad debts, outdated accounting practices, credit crunch and non-banking activities.
Unperturbed by external pressure, CBI, which was bent on reforming the banking system, has insisted that banks continue to adhere with IFRS strictures–even if they come at a cost to the stock market and banks' shareholders used to receiving fat dividends.
IFRS are a set of accounting standards developed by the International Accounting Standards Board and set to become the global standard for the preparation of financial statements.
The predecessor to IFRS was International Accounting Standards issued by International Accounting Standards Committee that was founded in June 1973 in London and was replaced by IASB on 1 April 2001.
IFRS applies to all businesses, including banking. By adopting IFRS, a business can present its financial statements on the same basis as its foreign competitors, making comparisons easier.
CBI, which is pursuing the development of correspondent relations by Iranian lenders in the post-sanctions era, intends to bring lenders in line with the global level.
Jamshidi hopes that the new task force would ultimately resolve the issue of delayed annual general meetings of banks.
Another issue discussed at the meeting, he added, was the allegedly high number of banks' physical branches.
"However, a comparison between Iranian and foreign lenders shows that Iranian banks, contrary to the common perception, have fewer branches," he said.
At the 57th annual general meeting of CBI held last week, President Hassan Rouhani had reiterated his criticism of Iranian banks, saying they were too many physical branches that make them inefficient.