Page 38 - IRANRptMay21

State banks in Iran continue to cut costs by selling off branches surplus to requirements
“petrochemicals, home appliances and automobiles” in trade exchanges. Jahan-e-San'at newspaper reported on October 15 that due to US sanctions around $40bn of Iranian hard currency assets in countries around the world was frozen. Of that $20bn was said to be stuck in China.
Also according to its report, India owes Iran $7bn, South Korea $6bn, Iraq $2bn and Japan $1.5bn. Iran lately struck a barter deal with Baghdad focused on food and medicines to allow it to utilise the capital frozen in Iraq.
Tehran has previously threatened to sue South Korea over its capital frozen in Korean banks.
Before the reimposition of heavy US sanctions in 2018, South Korean annual exports to Iran were worth $4bn, while South Korea’s annual imports from Iran stood at $8bn, according to Radio Farda. South Korea's imports from Iran in the first half of the current Iranian calendar year (began March 20) were valued at a meagre $5mn, it added.
State-owned Iranian banks are continuing with cost-cutting strategies that hinge on shutting down high street banks viewed as surplus to requirements, according to an economy minstry report cited by Donya-e Eqtesad.
Bank Melli Iran (MBI), Bank Mellat, Bank Sepah (sometimes wrongly associated with the Islamic Revolutionary Guard Corps, or IRGC) and Bank Tejarat (Trade Bank) are among those closing branches.
The state lenders have reportedly sold off branch assets for IRR280tn ($1.2bn at the free market exchange rate, but $6.7bn at the official rate) since January 2018 to private developers. The buildings are typically turned into restaurants or are torn down to make way for apartment complexes.
In the period stretching from the start of President Hassan Rouhani's first term in 2013 to the end of 2017, the state banks sold IRR135tn of commercial real estate assets, the report noted.
Successive governments in Iran have mounted increasing pressure over the years to force banks to divest all non-core assets, including companies that have come under their control following bankruptcies, impaired loans and bad debts.
Earlier in August, MBI announced it had divested non-core assets (commercial real estate and other assets) valued at IRR17.4tn ($102) in the previous Persian year (ended March 19).
Last November, MBI failed to find a buyer for the National Development Investment Company, which it listed as having a value of €1.4bn. The business appears to have a level of debt that makes it unattractive to buyers.
Other failed sales concern some retail bank branches in Tehran and elsewhere. MBI and other banks have attempted to dispose of them, but due to the ongoing inflationary effects of the severe devaluation of the Iranian rial, they have struggled to find buyers.
8.2 Central Bank policy
Iran’s debit card rules overhauled in favour of business
The Central Bank of Iran (CBI) has announced that business and legal entities are now entitled to debit cards specifically designated to them and associated qualifying individuals, IBENA has reported.
The rule change comes following lobbying by business groups for companies to be allowed to spend on their cards instead of switching expenditure between the personal accounts of company directors—such an approach causes issues down the line for the tax authorities in tracing outgoings and profits.
The CBI directive clears the way for multiple directors and sales teams to hold
38 IRAN Country Report May 2021 www.intellinews.com