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EghtesadOnlne: The Central Bank of Iran Tuesday unveiled the ‘Centralized Database for Loans and Commitments’ known by its Persian acronym Samat, planned to enhance the CBI’s oversight of loans by banks.

Abdolnasser Hemmati, the CBI head, said he was hopeful that the platform would improve banks’ (often controversial) lending process, which is said to be the root cause of financial corruption.

"The platform will assist the central bank make more efficient policies as it would provide important data," Hemmati was quoted as saying by the bank’s website.

Banks from now on must get a special code from Samat before paying loans. "This would give the CBI access to information on guarantors, collateral and the credibility of those wanting to take out loans.”

Lenders must also get a code before issuing checkbooks. The database is accessible to all bank branches across the country.

"Lenders are not allowed to pay loans to applicants with bad credit records logged in Samat," the senior top banker said.  

The NPL ratio of Iranian banks is high compared to developing and developed countries where it is mostly in single digits and usually below 5%.

The high NPL ratio has hurt the balance sheets of banks and forced many to stop lending, despite the chronic need of businesses to borrow.

Non-performing loans of Iranian banks were 1,770 trillion rials ($7.7 billion) at the end of the second quarter of the last fiscal year (Sept. 21, 2020). Compared to the March-June period it was 15% lower but on an annualized basis 4% higher.

NPLs have risen steadily in the past two years, from 1,510 trillion rials ($6.56b) in Q4 of fiscal 2019-20 (January-March) to 2,090 trillion rials ($9.08b) in the next quarter.

Defaulters try to disguise themselves as entrepreneurs to avoid or delay their financial commitments, arguing that the repayment of debts would mean downing shutters and firing workers.

In December Hemmati said big loan defaulters had repaid 30% of their arrears. Up until then 11 major debtors owed 900 trillion rials ($3.6b) to the banks, he said without naming names.

Banks paid 16,060.5 trillion rials ($69.8b) in loans in 11 months to February 2021. Lending increased by 7,874.8 trillion rials ($34.23b) or 96.2% compared to the same period the year before, CBI data shows.  

Since 2019 the CBI has been announcing rules to improve control over banks and promote the transparency of their bookkeeping. The measures, among other things, are to help ensure anti-money laundering measures, curb tax evasion and discourage speculation in financial markets, namely forex and gold.


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