Notification of the circular for refunding the additional funds received by the banks

Seyyed Abbas Hosseini, Deputy Minister of Banking, Insurance and State-Owned Companies of the Ministry of Economic Affairs and Finance, issued a circular to the CEOs of state-owned banks and banks in which the government owns shares.

This circular is addressed to the national banks, Sepah, Mellat, Trade, Export, Workers’ Welfare, Export Development, Agriculture, Housing, Post Bank, Cooperative Development and Industry and Mining:

As they note, despite the central bank’s emphasis on the need to apply interest rates approved by the Monetary and Credit Council to facility contracts, this has led to numerous lawsuits against banks in recent years, which have dealt with increased litigation and various litigation costs. Expertise and power of attorney have led to litigation.

Following this, the Unity of Procedure 794 dated 21 August 1399 of the General Assembly of the Supreme Court on the invalidity of the condition contained in the contracts for granting bank facilities in excess of the above profits was issued, the provisions of which are based on the last part of Article 471 of the Code of Criminal Procedure. It is mandatory for courts and other authorities, both judicial and non-judicial.

Therefore, in order to comply with the law, support production, prevent delays and impose unnecessary costs on banks, as well as following the agreements reached in the meeting of the Ministry with the CEOs of banks, it is appropriate to immediately implement the provisions of the vote. Unity of the mentioned procedure based on adjusting the contractual interest rate or refunding the excess funds received (including interest and surplus liability funds) from the beneficiaries without the need to file a lawsuit in court and only at the request of the client and observing the rules and regulations, including the following criteria: Necessary consideration and action:

1- All or part of the facility is not settled at the time of the customer’s request (whether it is on the current floor or non-current).

2- The facility agreement between the bank and the customer is of the type of exchange contracts.

It should be noted that in the case of partnership contracts, in the years when the Monetary and Credit Council has set the expected minimum interest rate, it is not subject to the unanimous vote of procedure 794 and the present circular, but in the years when the said rate has a maximum ceiling. However, contrary to the approvals of the Monetary and Credit Council, the bank has applied a higher rate than the maximum set in its calculations and demanded excess interest. The said rate should be adjusted to the maximum rate approved by the Monetary and Credit Council. Acceptable documents claiming that the actual profit exceeds the expected profit ceiling will require an agreement between the parties or a review by a judicial authority).

3- If the borrower has a non-current debt, he must determine its obligation, including debt repayment or deferral, according to the criteria set out in the instruction for deferral of claims of credit institutions and the regulations for collection of claims by the end of June 1401.

4- There is no report indicating that the amounts paid outside the subject of the facility contract or the transfer of the subject of the contract to a third party without the permission of the bank.

5. If the facility recipient has filed a lawsuit with the courts regarding the bank interest rate (against the bank), the final application of the provisions of this circular and the issuance of the facility settlement certificate is subject to the preparation of a correction report and return of the said lawsuit.

Obviously, any matter other than the above conditions will be in accordance with the relevant legal provisions and within the jurisdiction of the judicial authorities.