EghtesadOnline: Bank Maskan, as the country’s only specialized lender in the housing sector, will be supported by the Iranian government, particularly the Ministry of Roads and Urban Development and the Ministry of Economic Affairs and Finance, to increase its capital and become a development bank.
Minister of Roads and Urban Development Abbas Akhoundi made the announcement during the inauguration ceremony of Bank Maskan’s new CEO Abolqasem Rahimi Anaraki who was appointed to his post through an executive decree from the Minister of Economic Affairs and Finance Masoud Karbasian on Monday.
“We have already been trying to improve Bank Maskan’s capital adequacy ratio, which fortunately led to the approval of 100 trillion rials ($2.24 billion) as recapitalization for the bank by lawmakers in the parliament,” Akhoundi was also quoted as saying by IBENA.
The minister noted that through the measures taken by the bank’s previous CEO Mohammad Hashem Botshekan, half of the injected fund was added to Bank Maskan’s capital that increased the bank’s total capital buffer to 80 trillion rials ($1.79 billion), according to Financial Tribune.
“If the housing sector wants to get out of its long-lasting recession, we need a Bank Maskan with more than $10 trillion in capital that is able to influence the market at any point and move the market,” he added.
Iranian banks shoulder the financing of more than 90% of projects as well as small- and medium-sized enterprises in the country and this is while they have been dealing with a crippling credit crunch for several years due to the wrong monetary policies.
Since the administration of President Hassan Rouhani took office more than four years ago, it has been trying to improve the situation of banks by increasing their capital. This will enable them to offer financial services and loans to various sectors in the country, which might help the economy to end the slump, especially in the industrial and housing sectors.
Akhoundi also urged Bank Maskan to expand its monetary and banking tools by establishing specialized investment funds or publishing bonds that would enable it to stir the housing market.
“Currently, our biggest problem is that there is a significant absence of regulation for development banks, which needs to be devised as soon as possible. Since development banks implement the government’s policies, they should also have a say in establishing financial regulations,” he concluded.