Determining the growth scope of banks’ balance sheets based on 7 regulatory indicators

According to Fars news agency, citing the public relations of the central bank, the control of a certain amount of assets of the banking network is determined and communicated according to the points calculated based on the indicators of banking health and based on the targeted liquidity, while it is allowed based on the approval of the monetary and credit council of the central bank. Determine and apply the legal deposit ratio for unhealthy and delinquent banks and credit institutions up to 15%.

In accordance with Circular No. 421929/99 dated 12/27/1399 in connection with the “Regulations Overseeing the Control of Certain Assets of the Banking Network of the Country”, in order to match the growth of the balance sheets of banks and credit institutions with the indicators of stability and health, this bank has made decisions In the 20th meeting dated 05/08/1401, it adopted and announced that the most important of them are as follows:

A- The limit mentioned in Article (2) of the rules governing the control of certain assets of the country’s banking network, the subject of Circular No. 421929/99 dated 12/27/1399 of the Central Bank (based on the first period until the time of calculation ), according to the score calculated based on banking health indicators and based on liquidity, targeting will be determined and subsequently communicated to that bank/credit institution.

B- The health indicators to adjust the monthly growth limit of banks and credit institutions in six-month intervals should be calculated, evaluated and revised if necessary.

Also, considering the need to change the legal deposit rate of banks and credit institutions that violate the limits of the mentioned criteria, the Money and Credit Council in the 1339th minutes of the meeting dated 04/05/1401 regarding The permission to increase the legal deposit rate of banks and credit institutions with violations stipulated:

“The Central Bank is allowed to increase the legal deposit ratio for unhealthy banks and credit institutions that violate the rules and regulations governing the growth of their balance sheets according to the notified regulatory standards and based on the evaluation of their performance in complying with the notified rules and regulations as well as other approvals of the Monetary Council and Determine and apply credit up to 15% for all banks and credit institutions.

According to the mentioned cases, each of the banks and credit institutions are obliged to manage their assets in such a way that by the end of December of this year, the average growth of the included assets from the beginning of the calculation period does not exceed the permitted growth limit announced based on banking health indicators. . It is worth mentioning that the above-mentioned permissible growth limit is calculated based on banking health indicators as described below and subsequently notified to each of the banks and credit institutions through the supervisory departments as the case may be, and if necessary, it is evaluated and revised in 6-month intervals. will be placed:

• Bank/credit institution rating score based on the CAMELS method;
• capital adequacy ratio;
• Interbank market situation;
• overdraft status;
• The status of non-current Rial claims;
• Status of compliance with anti-money laundering directives;
• Professional judgment of the status of the bank/credit institution from the point of view of the inspection group within the framework of the relevant rules and regulations (observance of the interest rate of deposits and facilities, macro, related, investments and transparency).

It is worth mentioning that according to the provisions of the notified regulations, non-compliance with the prescribed limits will lead to the introduction of the CEO and board members of that bank/credit institution to the banks’ disciplinary board.

At the end of this circular, it has been emphasized that, along with the effective interaction with the relevant regulatory departments and also the regular sending of information related to the central bank in monthly periods within the framework of notification, the matters should be expedited and taking into account the provisions of Circular No. 149153. 96 dated 16/5/1396 to all its relevant units. The bank/non-banking credit institution has been notified and its proper implementation should be closely monitored.

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