EghtesadOnline: The Central Bank of Iran's new oversight plan for the banking system has employed the latest in international banking experiences and practices, announced the head of the much-anticipated scheme.
The main component of the plan, called the New Model of Supervision Over Banks, initiated by CBI in 2013 was presented to the Money and Credit Council for final approval on Feb. 1.
The model was officially unveiled at a meeting of Money and Credit Council –a decision-making body—on Sunday.
"At the first step, the current situation [of banks] was fully studied to gain a full understanding of the banking oversight plan," banker.ir also quoted Ahmad Badri as saying.
Badri, also an advisor to CBI Governor Valiollah Seif , added that effective and pragmatic insights were gathered for analyzing the oversight plan by studying the structure and characteristics of about 50 select countries, according to Financial Tribune.
"More than 20 experts and 70 professional advisors in accounting, auditing, banking, statistics, legal and jurisprudential issues worked on the plan and selected the general business plan of the European Central Bank as its core backdrop," he said.
According to the CBI advisor, the experts designed the fundamentals of the operational model in a way that bears the most relevance to the current state and structure of the Iranian banking system.
The next step, he added, consisted of designing the operational model that is governed by 29 principles of the Basel Committee on Banking Supervision and the laws regulating Iranian banking.
As outlined by Seif in early December, the new model of supervision “has been devised by employing the latest in international experience while completely localizing its components” and its execution is aimed at improving the effectiveness of supervision over banks.
Four Categories of Banks
Badri considered local design, adaptability, flexibility, reduction of systematic risk and being regulation-oriented among the most important characteristics of the new supervision model, based on which, Iranian banks will fall under one of the four categories.
These categories include banks that need only basic supervision, banks that must be supervised more carefully, banks that require obligatory reforms and those necessitating a complete overhaul.
As Badri said after the initial MCC meeting, the plan was launched two and a half years ago and consisted of six months of field studies and two years of joint implementation by CBI and Shahid Beheshti University.
In his latest remarks outlining the plan, he said the oversight regimes of 23 countries were explored and analyzed while studies were done on general banking laws of 12 countries.
"We used parts of the data as samples and added in the factor of the rules and regulations of the Iranian banking system," he added.