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The Central Bank of Iran (CBI) has unveiled details of the much anticipated banking overhaul plan which is intended to reform Iran’s beleaguered banking sector. President Hassan Rohani signed the draft law launching the plan last month, but parliament has already objected to elements of it.
But the law needs the green light from parliament before the government can start addressing problems in the banking sector. With parliamentary approval unlikely to be forthcoming soon, the reforms may not be launched before next year’s presidential elections in June, the outcome of which may see them permanently derailed.
The plan which has been in the making for a year, will seek to get financing for short- and medium-term projects back on track, provide a cash cushion to tackle bad loans, promote competition, reorganize the money market by regulating “the army of uncertified credit and financial institutions,” and increase bank’s lending power through recapitalization.
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