It is forbidden to block a part of banking facilities
According to the financial news, on 18 October this year, the Central Bank announced that according to the circular of 23 March 1400, it is prohibited to take any deposit as cash collateral, before or after the granting of facilities by banks and non-banking credit institutions.
In this regard, a part of the audience of the Young Journalists Club complained about the non-implementation of this directive and wanted to follow up on the matter.
One of the audience stated: Although the Administrative Court of Justice has issued a decision to unblock the blocked funds of a part of the facilities of a bank, the branches of this bank refuse to do so.
Another audience raised: Wasn’t part of the facility supposed to be blocked, but why some banks and branches do not comply with this.
Regarding the blocking of bank facilities, which is against the circular of the Central Bank, the chairman of the Economic Commission of the Parliament also expressed some points.
Blocking a part of the facilities is against the law and sharia
Poura Brahimi said: This blocking of a part of the facilities done by some banks and branches is against the law and Sharia, and the Central Bank was obliged to submit its monitoring report in this regard to the Economic Commission.
We went to the central bank to follow up on the issue, and the spokesperson of the central bank gave some tips.
Mustafa Qamari Wafa said: Banks do not have the right to block any part of the facility.
He stated: Failure to comply with the aforementioned directives in this regard is a violation by some banks and non-banking credit institutions, and the issue will be subject to regulatory measures and a plan in the banks’ disciplinary board.
He said: If banks and non-banking credit institutions, in line with Circular No. 100832/99 dated July 9, 2019, before granting the facility and subject to a previous agreement, have taken cash collateral in the form of a long-term investment deposit from the recipient of the facility, the payment of accrued interest The said deposit is required to have an interest rate corresponding to the time period of that deposit, similar to deposits that are not collateral for the facility.
Banks that have blocked part of the loan are introduced to the disciplinary board
In this regard, Abuzar Soroush, the deputy supervisor of the Central Bank, had also announced that the banks that have blocked part of the loan will be introduced to the disciplinary board.
Despite the Central Bank’s explicit directive regarding the prohibition of blocking part of the facilities, but according to the audience of the Young Journalists Club, a number of banks do not follow this directive.
One of the experts in banking affairs stated some points about why this circular is not implemented by some banks.
Hojatullah Farzani said: Regarding blocking a part of the facilities, it should be said that this action is forbidden in terms of Sharia and law.
He stated: The central bank issues a circular on average every year to block the blocking of a part of the facility, and in the last year, this has been issued almost three times.
Farzani said: Central Bank has the legal authority to enter and deal with the offending banks in this field.
He stated: If a part of the facilities received by the people has been blocked by the banks, people can write to the Central Bank’s Complaint Handling Department to file a request for investigation and register their complaint, and these cases will be followed up through the Central Bank and the blocked part will be released. .
This banking affairs expert said: One of the reasons why banks try to block part of the facilities is that the cost of sukuk, in other words, the cost of money for banks is high, so banks have to increase their facility income.
He clarified: One of the ways that banks can increase the effective rate of their facility income from the 18% approved by the Money and Credit Council is to deposit a part of the facility or receive cash collateral, because with them they can earn new income in addition to this issue. Because the operating costs of banks are high, banks take these measures to generate new income.
According to the circular of the central bank, it is forbidden to block a part of the facilities. If the banks do not comply with this circular, they will be dealt with legally according to the promises made.