TEHRAN – Iranian banks have, so far, managed to sell 150 trillion rials (about $3.57 billion) worth of their excess properties following a government plan for pruning the country’s banking system, ILNA reported, quoting a banking official.

According to the deputy economy minister for banking and insurance, Abbas Memarnejad, based on the mentioned plan, banks are obliged to sell 400 trillion rials (about $9.5 billion) of their assets in order to reform the banking sector.

The mentioned assets are highly diverse and include a variety of items like lands, companies, firms, and shares, each group of which is being sold on its own terms and conditions, Memarnejad said.

“Banks which do not comply with the program for selling their excess assets will be subject to tax penalties,” he stressed.

Back in October, Iranian Finance and Economic Affairs Minister Farhad Dejpasand announced that a one-year program is underway for 10 government-owned banks (including the biggest lenders) to relinquish the excess assets– mostly real estate– and increase their cash reserves. 

The ministry unveiled a website designed for this purpose in early December 2019, on which over 170 trillion rials (about $4.04 billion) worth of Iranian banks’ excess properties were put for sale.

Speaking in the unveiling ceremony, Dejpasand said the plan is a step toward liberalizing the banks' resources to provide facilities for the country’s productive sector and to create more jobs.

Mentioning the fact that the excess assets of the country’s banks are much more than what has currently been offered for sale, the official noted that in the first phase only 170 trillion rials of such properties were offered for sale.

Iran’s banking industry is suffering, among other things, from issues such as poor balance sheets, capital inadequacy, inability to recover non-performing loans to the tune of billions of dollars, arcane rules, and dubious operations of illegal credit institutions that have been punishing the economy for years. 

In late August, Governor of Central Bank of Iran (CBI) Abdolnasser Hemmati said the bank has been working hard to reform the banking system long grappling with mismanagement and financial indiscipline.

EF/MA