Iran hopes to license its first two or three private banks by next month and wants the private sector to take a 50 percent share of the industry within five years, its central bank governor said Monday, February 19. Mohsen Nourbakhsh said the aim was to introduce competition into the nationalized banking system to raise efficiency and productivity. Nourbakhsh said there had been more than 20 applications to start private banks.
"For the current year (ending March 21) we hope that two or three banks can get the licence because they have to meet some criteria," he told a press conference. These included capital adequacy and sufficient trained management. By the end of the five-year economic plan which started this year: "I hope that we approach to 50/50, 50 percent by the private and 50 percent by the government (in terms of a share of the market)."
The plan also envisages a 5.5 percent annual growth target, more privatization, "diminishing the size of the government," achieving a balanced budget, encouraging non-oil exports and safeguarding jobs. The central bank governor said the introduction of private banking aimed "to increase efficiency and improve the productivity of the banking industry. "We prefer to have the private sector to create some kind of competition and improve the whole industry."
Nourbakhsh, speaking on the sidelines of an Islamic banking conference in the Malaysian capital, said banks and other financial institutions currently hold around $30 billion in deposits. He said Iran's foreign debt totals $8 billion, 70 percent of which is dollar-denominated. Nourbakhsh also said Iran's policy was to work with the World Bank and use their resources for financing various public projects "and this will continue." —(AFP)
© Agence France Presse 2000
© 2001 Mena Report (www.menareport.com)
