Page 30 - IRANRptMar19

He said he could not give more details due to the sensitivity of the issue over which a gag order has been placed.
8.1.1 Liquidity / assets
Iran’s facing a liquidity crisis, says US official
The US special representative for Iran, Brian Hook, was cited as saying on January 12 at an oil industry conference in the United Arab Emirates capital Abu Dhabi that sanctions were choking off Iran’s income streams and that Tehran was “facing a liquidity crisis”. Washington wants to see Iran’s oil exports reduced to zero as it continues with its strategy of throttling the nation’s economy to force Tehran to the table to negotiate concessions on its Middle East activities and policies.
Stringent government controls limit access to financing for businesses. State-owned commercial banks and specialized financial institutions account for a majority of banking-sector assets.
8.1.2 Loans
CBI pushing for loan-friendly banking
Interest rates on Iranian bank loans were lowered in line with the Rouhani administration’s plan to switch the banking system from savings-based to loan-friendly.
Peyman Ghorbani, CBI Vice Governor for Economic Affairs, said that commercial loans must be set from 18 to 19% from September 2. Loans were locked at 20% and above before the proposal to cut rates.
As it is, the banks are struggling with the current rates forced on them by the CBI as their business plans were previously based on high-interest savings accounts.
The lowering of interest rates was also set to come into direct conflict with the upgraded capital adequacy ratio outlined by the CBI. Banks that did not meet the ratio were at risk of losing their licence, the central bank said.
8.1.3 Deposits
8.1.4 NPLs
Saving rates fall to 15%
Deposit rates on Iranian bank accounts were lowered to 15% with daily short-term interest rates fixed at 10% since last September in accordance with the plan set out by the CBI, Banker.ir reported.
During the past decade, interest rates have historically been above 20% with some credit institutions in Iran offering over 30% for savers. The average loan rate at its highest was 33% in 2009.
CBI gives Iran’s NPL rate as 10%
The Central Bank of Iran (CBI) calculates that Iran’s overall bad debt now stands at 10% of the total debt market in the country, according to a late May Iranian Banker Journal report.
Around IRR1 trillion of bad debt existed in Iran; however other figures suggest the figure of non-performing loans is higher, with banks struggling to retrieve assets due to old-fashioned regulations which mean it takes a very long time to clear debts.
Iran’s overall NPL figure stood at 18%, according to prior CBI statistical releases. The reason behind the supposed improvement in NPL clearance is
30 IRAN Country Report March 2019 www.intellinews.com