EghtesadOnline: The main component of the Central Bank of Iran’s grand plan to overhaul its financial oversight regime has been presented to the Money and Credit Council for final approval, an advisor to the central bank governor said.
Ahmad Badri, an advisor to Valiollah Seif, also told IBENA that the New Model of Supervision Over Banks initiated by CBI in 2013 was unveiled at the decision-making body’s meeting on Tuesday.
“This plan was launched two and a half years ago and consisted of six months of field studies and two years of joint implementation by the central bank and Shahid Beheshti University,” he added.
As Seif had outlined in early December, the new model of supervision “has been devised by employing the latest in international experience while completely localizing its components” and with its complete execution, “we will be witnessing an improvement in the effectiveness of supervision over banks and a serious change in setting financial regulations”.
According to Financial Tribune, the CBI chief had promised that the plan would be officially introduced and made operational by December 20 and would “find its place by the end of the year [March 20].”
In his remarks on Tuesday, Badri referred to a set of balance sheet templates issued earlier this year, adding that they have been a part of the plan, be it “a small part”.
The balance sheet templates were first released by CBI in February in accordance with the International Financial Reporting Standards to improve the financial transparency and international operations of Iranian banks.
IFRS is a single set of accounting standards, developed and maintained by the International Accounting Standards Board.
These standards are capable of being applied on a globally consistent basis by developed, emerging and developing economies, and help investors and other users of financial statements compare the financial performance of publicly listed companies on a like-for-like basis with their international peers.
The standards are now mandated for use by more than 100 countries, including the European Union and by more than two-thirds of G20.
The advisor to the CBI governor also said, “The unprofessional management of banks, faults in independent audit reports and the weakness of the central bank’s supervisory system had become clear in light of the ailing economic conditions,” noting that the new supervisory model aims to remedy the situation.
This, however, does not yet signal the complete implementation of the supervisory plan, as it has only been presented to the MCC.
Badri noted that “the plan will soon be solidified in the banking system of the country.”