Iran News ...


8/24/06

Central Bank of Iran to punish banks refusing to cut rates, daily

Tehran, Aug 24, IRNA-Punitive actions will be taken against banks which refuse to implement the recent key ratification by Money and Credit Council to cut lending rates to 17 percent, said a senior banking official.

Central Bank of Iran (CBI) Governor Ebrahim Sheibani added the "punishments will be of diverse types" without going into details or saying the extent of the penalties.

"Private banks will have to extend facilities in accordance with the ratification and if they are found to be violating the law, they will face penalties of different kinds," the English-language newspaper `Iran Daily' Thursday quoted him as saying.

The CBI governor said leasing firms should also follow the same procedures.

"These (leasing) firms are mostly affiliated to banks or carmakers," he said, adding that cutting leasing firms' lending rates from 25 to 17 percent was a logical decision.

Sheibani said the possibility of revising the decision to cut lending rates for leasing firms is almost nil.

As many leasing firms reportedly refuse to extend facilities due to the Money and Credit Council's decision to cut lending rates from 25 to 17 percent, Mohammad Mehdi Mofatteh, a member of the council, said earlier this month leasing firms could still remain profit-making entities if they continue to do healthy business and avoid middleman-like approaches.

Reports on increase from 17 to 19 percent of leasing firms' lending rates are false, Mofatteh said, adding that the council has not reviewed its earlier decision in this respect.

Leasing firms are business institutions which make use of private capital as well as bank loans, he said.

They can easily make profits even with the current 17 percent lending rates, he said, adding the council's decision to cut lending rates to 17 percent will have no negative impact on the activities of leasing firms.

... Payvand News - 8/24/06 ... --



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