The most important reason for the dissatisfaction of banks is the vicious cycle of bank interest rates

According to the financial news report, citing the public relations of the central bank, Mesbahi Moghadam, head of the jurisprudence council of the central bank, in the 33rd Islamic banking conference, while enumerating the causes of banks’ imbalances and the ways out of them, stated: One of these reasons is the increase in non-current claims. And it is followed by imaginary and frozen assets and consequently imaginary and baseless incomes.

He added: Also, one of the other reasons is the imposed duties that are imposed by the government and the Islamic Council without proportion to the capacity and credit of the banks, which leads to a lack of liquidity due to reasons such as frozen assets, non-current claims. , unreimbursed debts of the government, etc. appear and cause discontent.

The head of the Jurisprudence Council called the cause and the most important cause of dissatisfaction the nature and quality of the bank interest rate and said: the cycle intended for bank interest is defective and generates dissatisfaction. Banking should be a function of the real economic situation of the market of goods and services. Banking should be closely related to the real market and the interests of the bank, depositors and shareholders should be derived from the real business and the real market.

He continued: Islamic banking should represent the realities in the real market of goods and services and the reality of this market should be in the bank. This happens when financial resources are given by the bank to the producer and merchant and everything obtained from this process is transferred to the depositors after deducting the attorney’s fees and the bank’s expenses.

The head of the Jurisprudence Council reminded: the interest that we undertake to pay on deposits today is the cost of money, but in Islamic banking we do not have such a thing as cost of money. This is the interest rate. The cost of money is nothing but interest. Depositors should benefit from production and trade profits. We have to see how much is the profit of production and trade in banking, and if the bank identifies the productive activity well and finances it, the profit obtained in this sector is a real profit.

He stated that the bank creates a cost with the commitment of interest on account at the very beginning, and clarified that: with the commitment to the depositor, banks demand interest from the recipients of financial resources, and this is while not checking the part that has been financed, how much profit is earned. has brought. For this reason, a large part of the facilities are not repaid, and while some of the recipients of financial resources do not return the facilities they received at low rates by earning huge profits. In the current method, the interest rate is taken from one hand and given to the depositor with another hand, and with this method money does not enter the production cycle.

Mesbahi Moghadam added: In Islamic banking, some suggest that the bank receives financial resources and enters into productive activities and earns profits based on real activities. In this method, even if it uses exchange contracts, its rate should be subject to the market of goods and services. Not a fake rate with the title of Ali al-Hasab interest rate! The way out of the banks’ dissatisfaction is to correct this issue and other issues that have been raised.

He said about credit management: credit resources must be managed and management means directing resources based on the priorities of different departments. Investments should be made in sectors that have higher returns, and in this process, the bank should monitor expenses. The credit given to a company should be based on validation and honesty and trust in the person receiving the resources. Electronic monitoring and other methods should monitor where these resources are consumed.

He added: “Revising the calculation of Qarz-ul-Hosna facility fees is on the agenda of the Jurisprudence Council and the Money and Credit Council, and we hope to move towards Islamic banking without any doubt or problem.”

The head of the legal council of the Central Bank said: The rate of default and delay in payment of installments in Qarz Al-Hosna banks is lower than other banks and has decreased from 1.8% to 1%.

He continued: Shariah supervision in banks is done with the cooperation of CEOs and board of directors in 20 banks, and today three banks and also three Shariah supervisors are appreciated and thanked.

The Chairman of the Fiqh Council of the Central Bank also said about the loan facility fee: as Imam Rahel said, the facility fee should be only the fee for work and services and not more than that, but until now this fee was charged at the same rate of 4% in the loan facility, while Banks’ fees are supposed to be revised in the Jurisprudence Council of the Central Bank, and this fee may be less than 4% in some facilities.

Mesbahi Moghadam added: We are trying to move towards real Islamic banking, and in this regard, I would like to thank the two Qarzul Hosna banks, which have attracted a lot of credit and have more customers, and the branches of these two banks are more crowded than other banks, and people are more welcoming.

He added: In order to solve the banks’ disharmony, credit management should be done, and this credit management means that the payment facilities are properly monitored so that they are spent in their place. It should not be the case that a parts maker borrowed 5 billion tomans 15 years ago and instead of spending it in the factory and creating employment, he spent it on buying 5 apartments and by selling them, he earned double the profit, while instead of producing He used to produce car parts inside the country, in China, and bring them to the market with an Iranian label.

The head of the legal council of the Central Bank said about Islamic contracts: In exchange contracts, it should be subject to the state of the economy and the business of goods and services.

He added: We have to enter in the field of credit provision and direct facilities and liquidity, and this is the weak point of our country that we still do not have an industrial map and an agricultural map, and banks must pay loans based on the industrial map and agricultural map.

Mesbahi Moghadam added: Bank facilities should be granted based on validation, honesty and trust in the recipient of the facility should be respected. In this context, a joint account should be established between the borrower and the bank, so that the facility is paid from this account, and whatever income is earned, is deposited into this account to monitor the way the facility is spent.