Central Bank Governor of Iran: Bank Arrears Amount to 100 Trillion Tomans

Valiollah Seif, the Governor of the Central Bank of Iran, has stated that the country's bank arrears amount to 100 trillion tomans. In an interview with the Fars News Agency published on Tuesday, June 1, he said, "We intend to reduce this figure by 10 percent this year." The Central Bank Governor also reported a decrease in the "rate of increase in bank arrears from 14.7 percent in 2013 to 10 percent by the end of 2016." Seif's remarks come despite him having stated in February 2017 that Iran's bank arrears were "105 trillion tomans," which represented a 17 percent increase compared to the end of 2015. Meanwhile, a report from July 4 by the daily Arman estimates the volume of bank arrears to be as high as 125 trillion tomans. The issue of bank arrears was a contentious topic during the recent presidential debates and campaigns in Iran. President Hassan Rouhani claimed that at the beginning of his administration, the rate of bank arrears was 15.1 percent, which has now decreased to a maximum of 10 percent. However, Gholamhossein Mohseni Eje'i, the spokesman for the judiciary, denied this, stating that "bank arrears have increased during this administration, and we have witnessed an increase in the government's debt to banks, the government's debt to the central bank, and an increase in liquidity." According to media reports and statements from some officials, 80 percent of bank debts belong to 500 debtors. The Central Bank Governor previously stated that banks themselves follow up on "ordinary" bank arrears cases, while a "cross-agency task force" has been established at the Central Bank for "40 to 50 major cases." Seif announced that these cases would be referred to the judiciary after a "complete analysis of the situation." Previously, the names of some major bank debtors had been published in Iranian media, and some of them have been arrested. Ali Tayebnia, the Minister of Economic Affairs and Finance, stated in February 2017 that Amir Mansour Arya was at the top of the list of 500 bank debtors, who has since been executed. According to Tayebnia, Babak Zanjani does not rank among the top bank debtors but is among the largest debtors to the government. Babak Zanjani is currently facing the death penalty.