Non-compliance with the rules in the payment of large facilities by banks

The role of banks in the country’s economy is not hidden from anyone. Banks can play an important role in supporting micro-producers by providing facilities. However, if the central bank does not have sufficient and effective supervision over the activities of banks, banks can be in the wrong direction to provide facilities and to encourage speculative activities in various markets. While many small businesses and micro-enterprises need micro-facilities to get started, banks, as one of the most important financiers of micro-production units, not only do not play a good supporting role, but also prefer to provide facilities to producers. Wisdom, lend more to customers applying for large facilities. In this regard, we talked to Dr. Hossein Talebi Tadi, an expert in political economy and a university professor;

“When we discuss the causes of inflation or increased liquidity, the word ‘macro-facilities’ is very common,” he said. “Macro-facilities have had an impact on macroeconomic variables and the current state of the banking network.”

Asked what kind of facility is called a macro facility, the economist said: ‌ Whenever the volume of facilities granted to a single beneficiary (all persons with close family relationship or partnership or other types of common interest) is more than 10 If the percentage of the total capital of the bank is that facility will be considered large.

Talebi Tadi added: ‌ According to the regulations of the Central Bank, each bank can grant facilities to a single beneficiary up to 20% of its total capital. Also, the bank can eventually grant up to 8 times its capital to various facilities to various stakeholders.

In response to the question how macro facilities are effective in the economy, which is considered the most important factor of inflation and the people’s livelihood in the country’s economy, the economist said: “Increasing liquidity in the long run will increase inflation and also provide facilities for production. The liquidator and its repayment have created a liquidity erasure factor. Granting large facilities has a high risk of inflation for several reasons.

He added: “Documents in micro-facilities are much more liquid than large facilities, and if the customer is not able to repay the facility, the documents can be used optimally. Secondly, micro-facilities are generally used in less risky ways due to the possibility of customer disability.” In lower installment repayments, Soma large facilities are often paid to persons associated with the bank’s major shareholders, so the bank’s pressure to recover lost resources is not enough in many cases. As a result of the reasons mentioned, the possibility of non-repayment of large facilities is much higher than micro facilities and due to the high volume has a significant impact on increasing liquidity.

نا Unfavorable situation of large facilities

Criticizing the current situation of macro facilities in the country’s economy, Talebi Tadi said: “Despite such a destructive role that macro facilities play in the country’s economy, the Central Bank is inactive as the most important influential institution in this field.”

The university professor said that the current situation of Iranian banks in terms of compliance with regulations in this field is not favorable at all. Has not been published at all.

He said that the situation is not very good among the banks that have published the status of their large facilities. He said that 4 banks have negative capital due to the increase of debts from assets in the balance sheet and do not have the right to grant large facilities, while they have a large amount of registered large facilities. Among other banks, more than 6 banks have granted more than the allowable amount of large facilities; For example, while banks are only allowed to lend large amounts equal to 8 times their capital, one of the banks has lent more than 100 times its capital. It is clear that granting large volumes of macro-facilities for the reasons mentioned will both increase the risk of rising inflation and widen the class gap.

Talebi Tadi added: ‌ This inaction of the policymaker and supervisor of the proper implementation of laws by banks is one of the most important reasons for this economic laziness. While the banks were supposed to be the drivers of the country’s economic growth, they engaged in destructive activities, and the people pay the price for this issue every day by tolerating inflation and class differences.

Tasnim