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releases. The reason behind the supposed improvement in NPL clearance is the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
Iran’s debt recovery market is lagging behind international norms in part due to a lack of verifiable systems like credit checks to weed out sub-prime debtors. A good deal of large debtors have still not managed to refinance their businesses, among them are automotive firms, large construction firms as well as municipalities.
8.1.6 Banks specific issues
Iran attempting to finalise regional card payment network beset by achingly slow delivery
Iran is in negotiations with Russia to finalise a joint regional card payment network, IBENA reported on July 16 citing Abutaleb Najafi, director of the Iranian Informatics Services Company.
The long-awaited connectivity between Iran’s SHETAB bank card system and Russia’s MIR has been delayed by issues such as difficulties in technology integration. Looking at obstacles, Najafi reportedly referred to Iranian banks not having implemented “chip and pin” technology on 90% of their cards.
So far only a handful of Iranian banks have invested in chip and pin technology. They include Bank Shahr “City Bank” and Mellat Bank. Iranian retailers, meanwhile, still have little knowledge of the system.
Najafi described achingly slow progress in achieving connectivity. Only a select group of people have been issued the necessary cards so far, with the objective of getting them to try the cards out in Russia.
"The Russians believe that as banking cards in Iran are mostly magnetic and less secure than Russian cards, in the event of counterfeit cards, Iran will suffer the damage, and thus have to pay the costs,” he was quoted as saying.
He added that gradual progress in the connectivity project would first deliver limited access to ATMs in Russia and Iran for the citizens of the each country in order to limit the possibility of fraud via point-of-service terminals.
8.1.7 Bank news
Taiwan’s Mega Bank to stop Iranian trade payment clearance
Taiwan’s Mega International Commercial Bank has announced that it is to terminate its payment clearing mechanism linking Taipei and Tehran by November, IBENA has reported.
Taiwan, which is closely aligned with the US and is working with Washington towards the denuclearisation of North Korea's military, has a diminishing amount of trade with Iran compared with China’s mainland. Beijing has stated that it will not fall in line with US sanctions on Iran.
“Our business with Iran is too sensitive, and we should no longer get involved in it,” an official from Mega International Commercial Bank reportedly told Reuters, adding that the lender has informed clients that the payment clearing mechanism is likely to be terminated after November.
Trade between Iran and Taiwan reached $1.10bn worth of non-oil goods in the previous Persian year which ended in March.
32 IRAN Country Report September 2018 www.intellinews.com