Will the Protests of the Financial Victims Reach a Conclusion?

The condition for monetary-financial stability in the credit market is the existence of social capital trust and a reliable and predictable process of transactions among institutions, organizations, and individuals, including investors and depositors. According to financial-banking literature, a crisis occurs when this process and cycle of transactions among players is disrupted for any reason. Currently, when depositors of financial institutions such as Arman, Caspian, and Padideh Shandiz are unable to retrieve their capital, it is defined as a crisis. Thus, with the emergence of a crisis of credit and trust, which is the main capital of the banking and credit system, the ground is prepared for fleeing from this financial-banking system. In response to this crisis in recent weeks, various groups of depositors from the financial institutions Arman, Caspian, and Padideh Shandiz gathered in front of the parliament and other government institutions to express their protests against the loss of their deposits. In some of these gatherings, the victims expressed their understanding of the causes of the problems leading to the loss of their money and the reasons for the failure of the protests. Following these gatherings, Valiollah Seif, the head of the Central Bank of the country, referred to the situation of some financial institutions and stated, "One of the serious programs that the Central Bank must pursue is to organize financial institutions... However, for our compatriots who have deposited their money in these institutions, the managers and officials have not acted responsibly with the people's assets and have destroyed part of it." The head of the Central Bank also mentioned the cooperation of the judiciary to resolve the problems of financial institutions, claiming: "The judiciary is trying to return the assets that have been obtained from the people's funds under any circumstances to maximize the possibility of repaying people's deposits." This Central Bank official also mentioned the seizure of several accounts of the Caspian institution, stating: "In line with the complaints of some depositors, several accounts were seized, and now, by the order of the judiciary, part of these accounts has been released so that payments under 200 million tomans can be made." However, the phenomenon of financial loss is not limited to financial institutions. Recently, according to Iranian media, a gathering of victims from the Iran Khodro dealership took place in front of the parliament, the Ministry of Industry, and Iran Khodro, which has also not yielded results so far. These media have reported that the official Iran Khodro dealership sells cars to applicants after receiving funds from them. More than a year has passed since the car sales, and the managers of the Iran Khodro dealership have fled without delivering the sold cars. The protests of the victims are gradually expanding, and if they cross certain thresholds, they could exacerbate a political and economic crisis. Such protests could become a focal point for other protests and turn into nationwide demonstrations. The pertinent question here is—if the possibility of protests by the financial victims exists in the political crisis, why is the Iranian regime unable to resolve these issues? Was the financial loss crisis predictable? The existence of influential gangs in the regime that disregard the law, although one of the conditions for the inefficiency of the financial system, is not the only problem. Official institutions, whether policy-making or supervisory, also lack efficiency in performing their duties and are intimidated by the power gangs in the regime. The problems created by financial institutions are not surprising. Many have previously warned about the negative consequences of such institutions' activities. It should be explained that the internal financial system of a country consists of several components such as institutions (central bank and banks, supervisory bodies), laws, and policies. If there is no consistency among these components or if one of the components is absent or ineffective, the financial system will fall into crisis. One of the conditions for financial and monetary stability is the adherence to the rules of the game or, in other words, the compliance of economic players and institutions with the policies set by higher authorities. Just as without the compliance of players in a football match, one cannot expect a quality and fair game, without adherence to banking and financial policies, one cannot expect financial and monetary stability. The emergence of financial institutions has been facilitated by the collaboration of various institutions, including the IRGC, Basij, and mosques, along with a range of their affiliates, who, by intimidating official institutions, seek to bring more of the social and economic sphere under their control. Most financial-credit institutions were established before the non-organized monetary market regulation law was passed in 2004, obtaining operational licenses from institutions such as the police and the Ministry of Interior. Although the Central Bank of Iran has taken measures to organize these institutions since late 2010, the effectiveness of the Central Bank's policies and actions is questioned. Although these institutions were established under the guise of interest-free loans and charitable activities, they lack transparency and accountability and do not comply with banking and credit regulations. Since the activities of this informal sector of the banking-credit market are not transparent, money laundering, smuggling, and tax evasion within these institutions are not surprising. Additionally, these institutions channel liquidity into speculative and brokerage paths, which is why they can compete unfairly with official banks by offering high-interest rates to depositors. Therefore, the activities of these institutions are not aligned with the monetary management of the country and national interests. Some of the most well-known financial institutions formed by these entities include: 1. Thamen al-Aimah Credit Cooperative (affiliated with the IRGC's Cooperative Foundation) 2. Iranian Financial and Credit Institution, renamed to Bank Hikmat Iranians (affiliated with the Army's Cooperative Foundation) 3. Mowlai al-Muwahhidin Financial and Credit Institution, renamed to Bank Iran Zamin 4. Qavamin Financial and Credit Institution, renamed to Ansar Bank (Ansar al-Mujahideen Savings and Interest-Free Loan Fund) 5. Sina Financial and Credit Institution, renamed to Sina Bank (previously affiliated with the Foundation of the Oppressed) 6. Kowsar Financial and Credit Institution. It is expected that the case of financial institutions will be sent to the judiciary based on what the Central Bank's president says and will meet the fate of millions of cases that are gathering dust. The judiciary lacks independence, suffers from widespread corruption, and is obedient to the institutions that created this financial loss crisis. In the continuation of the emergence of "Velayati" banking and credit institutions, recently, Ebrahim Raisi—the defeated presidential candidate—also revealed the interest of the institution he manages, namely the Astan Quds Razavi, in establishing a "usury-free loan bank," and it is unclear where the establishment process of this bank has led. In recent years, such institutions—organized rather than arbitrary—have attempted to extend their power into the monetary and banking sector. The result of such efforts today is that Iran's financial sector, according to Parviz Aghili, the executive director of the Middle East Bank of Iran, suffers from numerous problems with credit institutions, and to organize matters, half of Iran's banks should be closed or merged. The confusion of the financial victims indicates that there seems to be no specific institution responsible for pursuing their claims. Or if there is an institution following up on their problems, it lacks the necessary efficiency to return their capital. It is even possible that some institutions may try to tire the protesters through delay and concealment, preventing the follow-up of these victims' claims. A significant portion of the owners and officials of financial institutions are judicial, military, and religious authorities of the regime, who are capable of obstructing the judicial process regarding crimes, corruption, and embezzlement in these institutions. However, the problem is not limited to this. Iranian laws also lack the necessary efficiency to resolve such issues. The paralysis of the country's judicial and administrative system, although one of the causes of the crisis, is a much more fundamental problem that relates to the entirety of the country's administrative and managerial system. This system is unable to prevent crises and lacks the agility and efficiency necessary for swift and optimal resolution in the event of a crisis. It is expected that the case of financial institutions will be sent to the judiciary based on what the Central Bank's president says and will meet the fate of millions of cases that are gathering dust. The judiciary lacks independence, suffers from widespread corruption, and is obedient to the institutions that created this financial loss crisis.