Al-Monitor- The administration of Iran’s President Hassan Rouhani made three decisions on Jan. 30 that officials say will financially shore up commercial banks until the end of the Iranian fiscal year on March 20. However, the moves are widely seen as not enough to enable banks to lend money to businesses.
In their first decision, Cabinet members agreed that the Management and Planning Organization will allocate 146 trillion rials ($4.5 billion) in funds from the surplus account of the Central Bank of Iran (CBI) to the Keshavarzi, Melli, Refah, Sepah, Mellat, Saderat, Tejarat and Industry & Mine banks, as part of repayment of government debt to the banking system.
The Cabinet also authorized the eight banks to collectively issue up to 100 trillion rials ($3 billion) worth of Islamic bonds in the Iranian debt market by the end of the fiscal year. According to the latest statistics released by the CBI, total government debt to banks reached 1,432 trillion rials ($44.2 billion) in the Iranian month ending Nov. 20, up from 596 trillion rials ($18.4 billion) in March 2013. As such, while substantial, the sum set to be paid by next month accounts for as little as 17% of total government debt to banks.
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