Page 44 - IRANRptOct22

8.1.3 Deposits
Iran’s sight deposits grow at whopping 90.7% annualised rate
Sight deposits placed with Iranian banks grew at a whopping annualised rate of 90.7% in the first half of the Persian calendar year (March 20- September 21), far outstripping term deposits, the Tehran Times has reported.
With money supply in Iran expanding at a tremendous speed, the soaring use of sight deposits reflected people’s reluctance to keep money in banks for extended periods as they anticipate prices will rise at a higher rate than the interest rates on offer from local banks, it added.
Total sight deposits rose by Iranian rial (IRR) 2,572.5 trillion ($8.7bn at the official rate, $61bn at the free market rate) in the first half period to reach IRR5,407.4 trillion and were up 47.7% during the six months in question, according to a cited Central Bank of Iran (CBI) monthly report.
8.1.4 NPLs
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 the Rouhani cabinet's move in February to approve the penalty waiver for loans amounting to IRR1bn.
8.1.5 Bank news
US Supreme Court to hear bid from Turkey’s Halkbank to avoid Iran sanctions-busting charges
The US Supreme Court on October 3 agreed to hear a bid from Turkish state-owned Halkbank to avoid criminal charges of money laundering, bank fraud and conspiracy stemming from a scheme in which it allegedly assisted Iran in dodging US sanctions.
During the presidency of Donald Trump, Turkish counterpart Recep Tayyip Erdogan made attempts at getting the case dropped, but was unsuccessful, with federal prosecutors in the southern district of New York pushing ahead with their investigation.
As a bank that is majority-owned by the Turkish state, Halkbank is contending that it is immune from US prosecution under a 1976 law, the Foreign Sovereign Immunities Act. It limits the jurisdiction of American courts over lawsuits
against foreign countries. The US Justice Department has said that it believes the Act addresses only civil cases, not criminal prosecutions, and even if it was not applicable to the latter, the case falls within the law's exceptions for cases involving commercial activities.
Halkbank stands accused of helping to launder around $20bn of Iranian oil and natural gas proceeds in violation of US sanctions against Tehran. It has pleaded not guilty to charges of bank fraud, money laundering and conspiracy. The indictment alleges Halkbank used money servicers and front companies in Turkey, Iran and the UAE to evade sanctions.
44 IRAN Country Report October 2022 www.intellinews.com