Loopholes for banks

Following the decision made by the Central Bank of the Islamic Republic of Iran in order to standardize the interest rates, the Vice-President of Planning and Budget Commission of the Parliament considered a unanimous action by the banks as the most important tool in order to actualize the decision and called on the central bank to establish required supervisory mechanisms in order to monitor the implementation.
Qolamreza Tajgardoon said: "I am not aware of the nature of negotiations between the banks and the Central Bank, the extent to which experts' views have been taken into account or if they have finally reached any consensus, however, I believe that making a decision without thorough consideration and consensus among the members cannot really be trusted". He further added that given the plunging inflation rate, the decision to reduce banks' interest rates was not illogical. As to possible migration of funds out of the banks in case of any change in interest rates, he welcomed the possibility of such funds being directed to the stock market or productive sectors such as housing. With regard to the cases where certain banks have bypassed the regulations regarding the interest rate, Mr. Tajgardoon emphasized that extensive cooperation among the banks and large enterprises as well as intra-banking transactions create some loopholes to escape and therefore, it is vital for all the parties to reach a unanimous consensus on this issue.
Based on Eghtesad Online Report, quoting ISNA, Mr. Tajgardoon reiterated that the Central Bank is in the possession of all the tools necessary to conduct full supervision on the banking system performance and in view of the new decision to reduce the interest rates, the Central Bank should avoid the mistakes in the past and supervise in a more efficient manner.
At the end, he, once again, highlighted the need for the banks to be involved in the decision making for the interest rates and considered their full cooperation vital for reducing the interest rates given the numerous loopholes in the cash flow system of the country.