Financial Tribune- President Hassan Rouhani’s Cabinet has redirected the two major banking bills aimed at reforming the Iranian banking system to the Central Bank of Iran, announced a member of the bank’s Fiqh Council.
“The two banking bills named Banking Reform Bill and the Central Bank Bill have been sent back by the Cabinet for the CBI and the Ministry of Economic Affairs and Finance to conduct more reviews on them,” Seyyed Abbas Mousavian also said in a talk with IBENA.
Mousavian added that the Cabinet, which was supposed to ratify the draft bill before forwarding it to the parliament for final approval, had found shortcomings with them.
What is now referred to as the Banking Reform Bill first became law more than three decades ago under the moniker of Usury-Free Banking Law and has not been revised since.
The new version defines the duties of the banks and non-bank credit institutions, explains all banking operations and services, sets up a professional set of criteria for selecting new chief executives and board members, and makes provision for setting up internal risk and auditing committees.
On the other hand, the Central Bank Bill, whose law was first passed in 1972, aims to modernize banking regulations. Improving the independence of CBI, enhancing monetary policymaking and increasing CBI’s supervision over the money market are among its key goals.
Mohammad Reza Pour-Ebrahimi, the head of Majlis Economic Commission, had announced late October that the longstanding reform bills would be finalized in the parliament before the end of the current fiscal year in March. But early January, it became clear that the chances of the final drafts of the bills being approved by the parliament before the end of President Hassan Rouhani’s first term in the summer of 2017 are relatively slim.
The bills are seen as necessary for bringing much-needed reforms to the troubled banking sector and many officials have stressed their importance.
Kamran Soltani, the deputy head of Iran Chamber of Commerce, Industries, Mines and Agriculture, said on Saturday he envisions a brighter future for the banking system because of the implementation of such measures.
“In my opinion, if CBI does not back out from its current stance and pushes forward with reforming the banking system, a good future can be predicted for the banking system during the next fiscal year and the years ahead,” he said.
Soltani, however, noted that even though the central bank is powerful, “the banks also have good lobbies and connections that might force the central bank to retreat from its current position”.