Gov’t Enhances Transparency of Financial Systems
Following efforts to improve the financial transparency and discipline administrative bodies, the Central Bank of Iran has connected its Centralized Database for Loans and Commitments, known by its Persian acronym Samat, with another government-run system, dubbed the Comprehensive System for Management of Government Guarantees.
In a notice published on the CBI website, the bank said in cooperation with the Plan and Budget Organization, the two systems are now connected to help boost transparency, accountability and discipline in government finances and pertinent activities.
The move allows the PBO to probe government debts and financial liabilities emanating from debt repayment guarantees issued by the government.
Henceforth, data available at Samat will be the criteria for calculating government debt to banks and non-bank credit institutions, according to the CBI notice.
At present, the government’s arrears to banks, contractors and manufactures is 3,200 trillion rials ($28.5 billion). Debt to lenders is 580 trillion rials.
The government’s debt mountain has rendered funding development projects very difficult and visibly undermined the lending capacity of banks, particularly state-owned institutions.
The PBO launched the government guarantee management system in July and announced that access to government guarantees would be possible only through this system, indicating that guarantees by other bodies would be null and void.
The government usually guarantees repayment of internal and external loans, Islamic financial bonds, and purchasing strategic crops.
source: Financial Tribune
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