TEHRAN An official at Central Bank of Iran (CBI) said Wednesday that CBI is ready to start privatization in monetary and financial sectors and set up private banks. CBI's Director for Supervisory and Banking Affairs Nasser Yousefi-Kia reiterated, establishing private banks has been approved by the CBI and ratified by the Guardians Council and there is no legal impediments on the way of their operations.

Accordong to IRAN, speaking at the inauguration ceremony of the credit institution of company for development of construction industries, he added, the purpose of banking is to offer depositors a real share of the profit. Yousefi-Kia further said private banks will increase competition in speedily rendering services to clients and facilitate banking operations. He added that the new competition will also persuade the country's banking system to take steps for more competition with the private banks.

Alluding to CBI's support for private banking system, he added, The CBI will back institutions in disbursements of profits on deposits at real rates in line with existing regulations. The measure will encourage banks to compete with one another and at the same time to provide banking services to the public,' the CBI official noted. Referring to the payment of profits at real rates on deposits, he said, In lieu of the technical nature of the profession, the banks can distribute their real profits earned to the depositors in proportion to their share of deposits.