The Central Bank of Iran will no longer issue license for new private banks and money lenders, reports Bloomberg, following the new instructions given by President Hassan Rouhani. Several of illegal financial institutions which had received their operation-permits during the presidential of Mahmoud Ahmadinejad, collapsed in 2017. The closure of these private banks led to the late protests in Iran. The Central Bank has guaranteed to reimburse the depositors for which it has to dedicate huge resources.
Paying unsustainable interest rates by illegal credit institutions forced other Iranian banks to enter this competition which not only weakened them but also slowed the economy.
Recently the International Monetary Fund has also called for urgent restructuring and recapitalization of the Iranian banks which has been weakened by years of sanctions.
See the original article: Iran Halts Private Lender Permits After Crisis Fueled Protests