The necessity of transparency in the approvals of the Money and Credit Council to prevent the approval of inflationary proposals

According to the economic correspondent of Fars news agency, according to the regulation of facilities and obligations paid to bank-related persons of the Money and Credit Council, the limits of granting facilities and creating obligations for related persons by banks and credit institutions have been divided into two parts: individual limit and collective limit.

The individual limit of total net facilities and obligations to each related person must not exceed 3% of the bank’s base capital, and the sum of facilities and obligations to all related parties of the credit institution must not exceed 40% of the bank’s base capital.

In the regulation of facilities and large obligations, it is also acknowledged that the maximum total of facilities and obligations to each single beneficiary should not exceed 20% of the basic capital of the operating bank, in addition, the total of facilities and large obligations paid to all beneficiaries in each bank and credit institution , should not be more than 8 times the base capital of that bank.

The following chart was extracted by taking into account the information published in the audited financial statements and the information on facilities over 100 billion Tomans published by the Central Bank and shows the amount of violations by banks in the field of payment of large facilities and related parties.

Information on large facilities leading to Shahrivar published on Central Bank website

* Payment of non-excluded facilities based on the approvals of the Money and Credit Council

The review of the information published in recent months and the payment of mega facilities, tens of times more than the allowed ceiling set in the banking laws, indicates the accumulation of widespread violations in the allocation of mega banking facilities, the suboptimal and unfair allocation of these facilities and the increase of credit risk of banks.

Of course, it should also be noted that the basis for calculating the amount of violations of the law by banks is the limits prescribed in the regulations of large facilities and related parties; However, according to the positions of the central bank supervision deputy, apparently, a number of banks have obtained approvals from the Money and Credit Council and excluded part of the granted facilities from the scope of the rule of large facilities and obligations and compliance with the single beneficiary.

Therefore, it seems that a part of the large payment facility outside the set ceiling has been allocated with the approvals and exceptions of the Money and Credit Council, and these measures have caused disharmony in some banks. However, which banks have received licenses and whether private banks, some of which are very inadequate, are also subject to these approvals or not, are questions that have remained unanswered so far. It seems that most of the exceptions are related to state banks, but there is a need to extend the transparency of facilities in the granting of macro-banking facilities to the approvals related to the payment of these facilities in the Money and Credit Council in order to provide the possibility of maximum public supervision and to specify the approvals of the most important decision-making body in What exactly was the scope of the banking system and the reasons for adopting these policies.

* Requirement to publish the approvals of the Supreme Board in the draft law of the Central Bank

According to Fars report, according to the “Responsibility, Objectives, Structure and Duties of the Central Bank of the Islamic Republic of Iran” plan, which was approved by the Islamic Council and is being reviewed by the Guardian Council, “the principle in the deliberations and approvals of the Supreme Council is their non-confidentiality and public disclosure.” . In the draft of the Central Bank Law, the Supreme Council has replaced the Money and Credit Council.

Also, according to this plan, “the votes of the members of the Supreme Council, separating the names of those in favor, opponents, abstentions and absentees, will be included under the resolutions of the Supreme Council. Instructions on how to publish the deliberations and resolutions of the Supreme Council, and the conditions and timing of the release of secret resolutions from the secrecy, at the suggestion of the President It has been approved by the Supreme Council and will be placed on the information base of the Central Bank. Unpublishable cases are identified within the framework of the directives of the Supreme Council.”

It is hoped that the back-and-forth from the Guardian Council of the Constitution to the Islamic Council regarding this very important and vital plan of the country, which will cause very serious changes in the governance of the Central Bank, will end as soon as possible, and this law will replace the major part of the monetary and banking law. to be

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