EghtesadOnline: The Central Bank of Iran is bound to protect people’s investments and in line with that, the bank has so far paid 22 trillion rials ($586.6 million) from its resources to Samen al-Hojaj Credit Institution depositors and has guaranteed to pay another 22 trillion rials ($586.6 million) in the future for the merged institution, the CBI governor said.
“Concerning the insolvent Fereshtegan Credit Institution’s depositors, CBI has also designated credit line in order to shorten the process of reimbursing customers’ money,” Valiollah Seif was quoted by IRNA as saying.
He emphasized that these payments are based on the value of the available assets of the institutions and that CBI cannot just allocate resources without providing support for it or else it would increase the liquidity and lead to higher inflation.
CBI announced in May that the customers of the Fereshtegan Credit Institution will be gradually reimbursed by Caspian Credit Institution, a certified credit institution formed through the merger of several such institutions and cooperatives based in Khorasan Razavi Province, including Fereshtegan, Ferdowsi, Badr Toos and Al-Zahra. The merger came as part of CBI’s efforts to organize uncertified credit institutions, some of which have gone bust, according to Financial Tribune.
Depositors with a maximum 100 million rials ($2,653) would be prioritized by Caspian, which has been asked to attend to other clients as well as in coordination with CBI and the judiciary.
Seif also noted that CBI’s goal is to protect people’s deposits by all means. Therefore all the dissolved credit institutions’ available assets and those that will be identified later belong to their depositors and “if there is any shortfall, the institutions’ shareholders will be held accountable”.
He noted that the uncertified credit institutions are a legacy from previous governments, when the Law Enforcement Forces, and the Ministry of Cooperatives, Labor and Social Welfare licensed these institutions to operate while no one thought of the problems they could cause for the market and banking system.
Unlicensed institutions had made it difficult for the CBI to balance interest rates within the legal network because deposit rates offered by these institutions were always higher and had created grounds for money laundering. Eventually, many of them became bankrupt due to inefficient management and heavy investment in real-estate projects.