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EghtesadOnline: The total volume of term deposits attracted by the Iranian banking system in the six months to September 22 has hit 11.36 quadrillion rials ($275.4 billion), which indicate a growth of 25.5% year-on-year.

According to the latest statistics published on the Central Bank of Iran’s official website related to the country’s economic indicators during the period, banks also managed to collect 4.81 quadrillion rials ($116.6 billion) as short-term deposits, up by 15.5% compared with the previous year’s corresponding period.

The figure of long-term deposits attracted by Iranian banking system by the end of past summer had exceeded 6.54 quadrillion rials ($ 158.6 billion) to mark a whopping surge of 34% YOY.

The growth in the volume of term deposits happened despite the recent mandatory rate cuts, as the CBI obligated banks and credit institutions to refrain from paying high interests–that went up to 23%–after Sept. 2, and cap their interests on one-year deposits at the previously set 15% while paying a maximum interest of 10% to short-term deposits, Financial Tribune reported.

The data would be relief for monetary and government officials who feared that the recent monetary easing would prompt a capital flow from banks and into the more speculative currency and gold market, imperiling the hard-earned single-digit inflation achieved after nearly a quarter century last summer.   

As cited in the CBI report, private sector’s deposits in the Iranian banking system as of Sept. 22, 2017, reached 13.5 quadrillion rials ($327.35 billion) to register an annual increase of 24.4%.

Private lenders and non-bank credit institutions accounted for 71.3% of the entire volume of deposits. The figure reached 9.59 quadrillion rials ($232.5 billion), which is up 22.2% YOY.

The volume of private sector's deposits in state-run commercial banks up to July 22 stood at 2.64 quadrillion rials ($64.01 billion), marking a growth of 36.9% to account for 19.55% of all the private sector's investments in banks.

This is while specialized banks absorbed 1.3 quadrillion rials ($31.52 billion) from people's deposits, up17.8% YOY. Specialized banks accounted for 9.2% of the total deposits in the Iranian banking system.

The lion’s share of deposits were in the form of short- or long-term time deposits that accounted for 90.7% of the total amount at 12.21 quadrillion rials ($296.07 billion), up by 25.3% YOY. Sight deposits absorbed only 1.22 quadrillion rials ($29.58 billion), constituting 9.3% of the total sum.

This is while the government has withdrawn a part of its deposits in the banking system with the figure dropping by 4.7% to stand at 575.8 trillion rials ($14.02 billion) by September 2017. However, state-run companies’ deposits in the banking system increased by 13.8% to reach 45.4 trillion rials ($1.1 billion).

The total volume of banks’ reserve requirement in CBI by the end of the current fiscal’s H1also witnessed an annual growth of 22.9% and reached 1.5 quadrillion rials ($36.37 billion), as a result of the establishment of new banks and credit institutions, and the significant recapitalization of state-owned banks.

Banks’ sight deposits in CBI also climbed by 39.8% and stood at 88.5 trillion rials ($2.14 billion).

Liquidity and Foreign Assets

Money supply exceeded 13.88 quadrillion rials ($336.56 billion) by the end of the first half of current Iranian year to Sept. 22, up 23.8% YOY, according to the CBI data.

The volume of monetary base and money supply grew by 13.7% and 25.3% respectively compared with the previous year.

Data released by CBI for the current fiscal’s H1 put banks’ total foreign assets at 6.1 quadrillion rials ($147.9 billion), marking a growth of 7.3% compared with the same period of last year.

Almost 56% of the entire banking system’s foreign assets worth 3.54 quadrillion rials ($85.83 billion) belong to CBI. The value of CBI’s foreign assets as of Sept. 22 registered an increase of 4% YOY.

Private banks’ foreign assets, which constitute 27.1% of the total figure, also improved by 7.9% to reach 1.6 quadrillion rials ($38.8 billion).

However, commercial and specialized banks’ foreign assets, which collectively account for 17% of the banking system’s foreign assets, marked a respective increase of 18.8% and 20.2% year-on-year.


Iran banks Iran Term Deposits Iran banking system Iran Rate Cuts