![\"Irans-Failing-Banks\"](\"https:\/\/www.ncr-iran.org\/en\/wp-content\/uploads\/sites\/2\/2018\/08\/Irans-Failing-Banks.jpg\" "\\"Irans-Failing-Banks\\"")
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By Amir Taghati<\/p>\n
In a relatively healthy economic system, banks play an extremely crucial role, with monetary intermediation, creating money, providing extended loans and aggregating deposits being among the banks\u2019 major functions.<\/p>\n
By extending credits, banks actually turn their clients\u2019 relatively short-term deposits into long-term loans, and by aggregating deposits, banks accumulate depositors\u2019 relatively small savings into huge loans, capable of creating economic capacities.<\/p>\n
In short, banks could significantly improve economic growth by aggregating small deposits into huge loans to fund economic and production units. In Iran under the rule of mullahs, however, banks have themselves turned into the economy\u2019s super challenge, and places for regime\u2019s thieving and plundering.<\/p>\n
Financial statements of Iran\u2019s major banks show that they are insolvent, with embezzlement cases in banks being even more serious than the ones related to credit institutions.<\/p>\n
Due to sanctions, the regime is incapable of providing funds. Besides, pension funds are themselves part of the country\u2019s super economic challenges as they\u2019re too low on funds to pay the retirees. And as for the insurance companies, they, too, are unable to pay the workers who have lost their jobs due to factory closures. These entire factors have joined hands to force Rouhani government to withdraw from the country\u2019s banking system.<\/p>\n
Regime\u2019s embezzling from banks is carried out with first the banks offering huge interests on savings to attract deposits and then accumulating them into huge loans to be given to regime-linked figures, who in turn transfer the received loans out of the country without bothering to pay them back. That\u2019s how the banks are going bankrupt.<\/p>\n
According to the Article 141 of the country\u2019s Trade Law and based on banks\u2019 financial statements, many of Iranian banks are actually broke.<\/p>\n
\u201cA corporation is considered bankrupt if its losses exceed half of its capital, in which case the corporation\u2019s board of directors have to either dissolve the company or increase its capital with the help of its shareholders,\u201d says Article 141 of the country\u2019s Trade Law.<\/p>\n
According to the law, it could be seen that with regard to Iran\u2019s Day, Sarmayeh and Tejarat banks, the debts are even higher than the banks\u2019 assets, and as for Saderat and Melli banks, the amount of debt is nearly equal to the banks\u2019 assets, which by itself proves that the banks have actually gone insolvent.<\/p>\n
But what\u2019s the reason behind Iran\u2019s banking failure?<\/strong><\/p>\n The first cause is the government, using the banking resources to fill its budget deficit while failing to fulfill its commitments.<\/p>\n Deferred payments, also referred to as poisonous assets, are the second factor leading to Iran\u2019s banking crisis. While the banks\u2019 balance sheets show an estimated 200 billion thousand tomans of such assets, they actually don\u2019t exist. The third factor is huge investments made in real estate sector, with hundreds of billions of tomans being locked up and unrealizable due to a recession in the housing sector.<\/p>\n Where are the banks\u2019 unreturned loans?<\/strong><\/p>\n The term \u2018super debtor\u2019 is now quite a familiar one among regime\u2019s media. Being entirely affiliated with the regime, it\u2019s difficult to find out the names of such super debtors, with a few exceptions popping up every once in a while during clashes between regime\u2019s rival bands.<\/p>\n Mohammad Rostami, referred to as M.R. in regime\u2019s media, is one of the super debtors who has received 6,500 billion tomans in bank loans and facilities, including a 1700-billion-thousand-toman loan from Parsian Bank alone.<\/p>\n Rasoul Danialzadeh, a close friend to Rouhani\u2019s Brother \u2018Hossein Fereidoon, has a 2,300-billion-toman bank debt. Being closely connected to Hossein Fereidoon, Danialzadeh and another person named \u2018Shabdoost Malamiri\u2019 are the two who are behind many of Iran\u2019s bank embezzlement cases.<\/p>\n According to regime media, 20 super debtors –reportedly including the son of former mayor of Tehran \u2018Bagher Ghalibaf\u2019 as well as the son of Chief of Police– are close to 7,000 billion tomans in debt to Sarmayeh Bank,.<\/p>\n Insolvency of banks means increased inflation, recession, unemployment, poverty and social harms, and collapse of an already destroyed economy, with Iranian people having to pay the price out of their dwindling food basket.<\/p>\n","protected":false},"excerpt":{"rendered":" By Amir Taghati In a relatively healthy economic system, banks play an extremely crucial role, with monetary intermediation, creating money, providing extended loans and aggregating deposits being among the banks’ […]<\/p>\n","protected":false},"author":15,"featured_media":51895,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10],"tags":[178],"class_list":{"0":"post-25180","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-save"},"yoast_head":"\n
\nSimply put, the amount has been provided to loan receivers who are not going to pay it back.<\/p>\n