Introduction of Major Defaulters by Several Iranian Banks

Banks Saderat, Refah Kargaraan, Maskan, Keshavarzi, and Posta Bank published the names of their major debtors on Sunday, April 21 (April 10). A day earlier, the names of major defaulters of Bank Melli had also been published.

State news agencies in Iran reported that this action was taken in line with “transparency regarding large facility recipients and major defaulters”.

In the list of major debtors to banks, substantial amounts are evident. Among them, the debt of one debtor company to Bank Keshavarzi has been reported at over 500 billion tomans. In total, the combined debt of twenty companies to this bank is estimated at over “4 thousand and 600 billion tomans”. However, some banks have not disclosed the debt amounts of major defaulters in their lists.

Economic Minister’s Order to Introduce Major Bank Defaulters

The Minister of Economic Affairs and Finance in the Ebrahim Raisi administration had requested on November 14 of last year that banks and credit institutions publish a list of their major defaulters every three months.

Ehsan Khandouzi had also emphasized that banks and credit institutions should disclose the recipient’s specifications, the bank’s justification for allocating resources, the loan amount, payment amount, outstanding debt, interest rate, and type of collateral.

However, banks had previously refrained from publishing these names, and even now, some of these banks have made no reference to payment details and debt amounts in their major debtor lists.

The Economic Minister announced on the evening of Sunday, April 21, that in subsequent phases, the names of other debtors with debts below 100 billion tomans would also be introduced.

Khandouzi, speaking with Iranian state television, expressed hope that “this action will help these claims be collected from the banks more quickly”.

It appears that in the coming days, other banks will also publish the names of their major debtors.

In this regard, the Director General of Public Relations of the Central Bank said on Sunday that the bank “will publish the names of major debtors in the banking network from next week”.

According to FARS News Agency, Mostafa Ghanbari Vafa added that these names will be completed and updated in mid-Ordibehesht month.

The Shadow of Major Bank Defaulters on Iran’s Economy and Politics

In recent years, the issue of major debtors to the banking system has been one of the challenging debates in Iran’s economy and politics.

For example, during the presidential election debates in 1400, Abdolnaser Hemmati, former Governor of the Central Bank and one of the candidates in that election, submitted a handwritten note containing the names of 11 major bank debtors to Ebrahim Raisi, another candidate in that election.

Raisi had also said in one of the television interviews during that election that “the majority of bank arrears are in the hands of a few people”. He also replied to the program host’s request to introduce the names of these “few people” by saying: “We have prosecuted them; just naming them won’t achieve anything”.

He had also said in December 1400 in a meeting with chief executives of several banks: “Do not give leeway to bad debtors; publish their names and cut off their hands”.

Saeed Jalili, another presidential election candidate last year, had also said that 90 thousand billion tomans of bank arrears are in the hands of 11 people.

However, some experts say that corruption and rent-seeking economics in the Islamic Republic is the root cause of phenomena such as major bank defaulters, and therefore, by introducing current defaulters, this problem will not be fundamentally solved.