It is necessary to implement the policy of reforming the banking system

According to Iran Economist“Banking System Reform Document” last March in the meeting of the government’s economic coordination headquarters chaired by Ayatollah Seyyed Ebrahim Raisi Was approved. In this document, increasing the access of households and economic actors to bank facilities and credits and directing liquidity towards productive and job-creating activities is considered.

“Mohammedreza Farzin”, the head of the central bank, also emphasized on the implementation of the policy of reforming the banking system and adjusting the monetary program according to the current conditions in the meeting with economists.

“Fazel Muridi”, a banking expert, in an interview with Iran is an economist Regarding the reform of the banking system, he said: In the mid-seventies, the country went towards liberalization and privatization policies, and they started this policy from the most sensitive points, while the issue of privatization and reducing government tenure could have been discussed in railways, customs, health, and education. And to start breeding, intra-urban and extra-urban transportation that has little sensitivity.

He stated: There are two ideas and ways in the discussion of reducing government tenure and privatization, firstly, to reduce the government’s share in enterprises and hand it over to the private sector, the second way is to preserve the government’s share and to have the private sector participate.

This banking expert said about privatization in the banking sector: We allowed private banks to be present in the country under the name of competition and providing better services. Therefore, banks and private institutions started their activities, but we forgot that with the activity of natural and legal persons in banking operations, a wide range of interventions in monetary policies occurs.

He continued: With the beginning of privatization in banking activities, natural and legal persons for banking and foreign exchange operations carried out a wide range of interventions in monetary policies, interbank market and open market, while for this it is necessary to create infrastructure in the discussion. We are regulators and supervisors.

Meridi stated: It is natural that when there is no infrastructure, groups and institutions will behave profit-oriented like any other economic factor, and it will not enter in the form of policies that the policy maker believes in.

This expert clarified: In fact, we included the private sector in the most key components of governance and politics, without providing the necessary infrastructure, this is the most important weakness we had in recent decades, and this path must be corrected.

He continued: There are two opinions on reforming the banking system, one group believes that by strengthening the Central Bank’s supervision over banks and institutions, the authority and independence of the Central Bank will be strengthened.

Meridi said: A group also believes that reforming the banking system is practically impossible due to the large number of banks and stakeholders and the wide conflict of interests that exists, and the best way is to merge banks and reduce the number of banks.

This banking expert stated: Private banks that operate in free systems are equally likely to be liquidated, and this is acceptable and established. For example, in America, many banks are liquidated every week, every month, and every year. It is possible, but this issue is not common in the country.