Page 29 - IRANRptAug18

standards with new diktat
Basel III banking regulations. It is expected that several Iranian banks will be merged in coming months as their capital adequacy ratios are lower than the current required amount of 8%. Non-bank credit lending facilities have merged in recent years to meet ratio guidelines.
According to the CBI, updated guidelines are based on the latest international standards requested by the Swiss Basel Committee while also meeting requirements of the Islamic Financial Services Board and global Islamic banking rules.
The new move will see a further convergence of existing banks which have been ordered in recent months to find suitable partners to merge with as Iran cracks down on bad banking practices. Some non-bank credit institutions will be merged with local banks.
8.1.1 Liquidity
Iran’s liquidity volume exceeds IRR14.6 quadrillion at end of 10th Persian month
The total volume of liquidity in Iran stood at more than IRR14.63 quadrillion($325.62bn)bytheendofthe10t h Persiancalendarmonth (ended January 20), according to the Central Bank of Iran (CBI), Mehr News Agency reported on March 12.
The Central Bank of Iran (CBO) is presently aiming to keep as much liquidity in the system as possible to stimulate the economy; this is achieved in part by lowering the interest rate on savings accounts offered by banks and by limiting foreign currency withdrawals to a maximum of $1,000, recent decree issued on March 10 stated.
The monetary and banking sections of the latest CBI report on economic indicators determine that liquidity in Iran in the commercial sector increased by 22.3%y/ytoreachIRR11.96quadrillion($266.2bn)bytheendofthe10t h Persian month.
Also, the report notes that the overall volume of liquidity was more than IRR12.53 quadrillion ($278.88bn) by the end of the previous Iranian year (ended March 20, 2017).
In total, the banking system held the bulk of liquidity in the period to the end of the 10th month of the 2017/2018 Iranian year with some IRR6.8 quadrillion ($153.13bn) in holdings indicating a 21.5% y/y growth. This is while the volume of government and non-government debts to both public and private banks exceeded over IRR2.55 quadrillion ($65.75bn) and IRR10.27 quadrillion ($228.58bn). indicating increases of 22.5% and 17% y/y, respectively.
All banknotes and coins in circulation registered IRR535.7tn ($11.93bn), of which IRR358.1tn ($7.97bn) was held by citizens of Iran, while IRR106.7tn ($2.38bn) and IRR70.9tn ($1.58bn) were held by the CBI and private banks, respectively.
8.1.2 Foreign assets
Commercial banks’ foreign assets grow by 44.5% y/y
Foreign assets of commercial banks registered a significant increase, with some IRR466.8tn ($10.39bn) held in the 10th month, signalling 44.5% y/y growth. Liabilities of government and non-government entities reached
29 IRAN Country Report August 2018 www.intellinews.com