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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 the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
8.1.5 Banks specific issues
SWIFT reportedly disconnects Central Bank of Iran from interbank network
Iran suffered a wounding blow in early November when SWIFT, the world's biggest interbank-transfer network, announced under pressure from the US that it was taking the "regrettable" step of suspending some Iranian banks' access to its messaging system "in the interest of the stability and integrity of the wider global financial system".
Fearing a blanket ban on Iranian banks being connected to SWIFT, French officials have been working to keep at least one Iranian bank connected to the financial telecommunication system .
Belgium-based SWIFT (Society for Worldwide Interbank Financial Telecommunication) did not specify which “certain Iranian banks” it was referring to in its disconnection announcement. The move came as a disappointment to those trying to protect Iran’s trading activities, particularly given the potential disruption the loss of the system could cause to supplying the country with basic foods, medicine and other humanitarian shipments .
Iran’s central bank has claimed the SWIFT disconnection will “have no effect on Iran’s bank accounts and its foreign exchange settlements since it is “only an interbank messaging system”. Its governor Abdolnasser Hemmati told reporters that the regulator had made preparations for the disconnection, but did not explain what alternatives to the system would be employed.
8.1.6 Bank news
Iran, Syria sign banking cooperation deal but details are sketchy
The central banks of Iran and Syria signed a banking cooperation agreement on January 29 in a bid to connect the two countries’ banking systems, Syria’s SANA has reported.
How the two countries would go about creating their own banking system separate from the international system was not outlined, but, as the US continues to direct heavy unilateral sanctions at both Tehran and Damascus, they would likely have to link their central banks under the radar of Washington. The big and wider question faced by Syria remains how, once it can declare the Syrian Civil War over, it will raise enough finance to enter a meaningful post-war reconstruction phase.
The agreement was signed by the central banks’ governors in Damascus.
It is “aimed at serving stabilisation of the banking sector” and “enhancing it and facilitating trade exchange encouraging investment”, the two sides said in a joint statement.
Central Bank of Iran (CBI) chief Abdolnasser Hemmati posted on social media that the agreement would enable the countries to restart brokerage relations in the run-up to opening a new bi-national bank.
Under the agreement, the central banks of the two countries will open bank
31 IRAN Country Report February 2019 www.intellinews.com