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EghtesadOnline: The Economy Ministry is apparently determined to compel banks to accept collateral-free microloan requests as it has set a deadline for state-owned lenders to submit a report to this effect.

In a letter to the CEOs of 13 state-owned banks, the Economy Ministry has asked them to inform customers about collateral-free loans via bank branches and websites. Inspection departments of banks are tasked to visit branches at random to make sure that banks are in compliance, IBENA reported. 

The public information by banks must include the link to the Economy Ministry's website so that customers can tell the ministry if banks refuse their loan applications. Complaints by the people will be reviewed within two days and if found valid the manager(s) of the dissenting banks will be sacked.

As per the lending rule of the Economy Ministry, pensioners and salaried employees can now borrow up to 1 billion rials from banks without putting up collateral.  

Instead of collateral, employees should present their salary certificate for loans of up to 500,000 million rials. For loans above this amount they need to submit a check or promissory note. 

The move is in line with plans by the Central Bank of Iran to promote lending by banks based on customer credibility rather demanding collateral and/or guarantors when processing loan requests.

Ehsan Khandouzi, the Economy Minister in meeting with bank CEOs on Saturday stressed that reliable and creditworthy applicants should be able to take out loans washout any hassles. 

"This move is not to boost the government's popularity. The intention is to help revive the people's hope. All state banks are obliged to comply," Khandouzi said. "No excuse will be accepted…all eligible applicants must receive the loans.”

Bank Melli Iran on Sunday said it is ready to extend the loans to creditworthy customers without the guarantees. 

Ali Salehabadi, the CBI boss, has warned banks against disrupting the lending process. "Banks must accept the loan applications.”

The Bank of Industry and Mine, Post Bank Iran, Bank Tejarat, Mehr Interest Free Bank, Refah Bank, Bank Mellat, Bank Saderat Iran, Cooperatives Development Bank, Bank Keshavarzi and Bank Sepah have posted notices about the easy loans on their websites. 

Record of past loans, the borrowers’ check transaction performance and even their performance in paying traffic fines and utility bills in a timely manner are among the criteria for assessing the credit profiles of borrowers.

Earlier in the month, Mahboub Sadeqi, head of the CBI information department, said effective credibility assessment will help improve access to banking facilities for credible applicants. 

Banks pay unusually huge amounts in controversial loans to big businesses and vested interests, but small loans are few and far between accounting for a meager part of the total lending.