||Thursday 23rd February 2017|
In the14th Management Congress held on December 27th in Milad Tower, Tehran; Ghassemi pointed out the Article 9 of General Policies of Resilience Economy of I.R.I, which emphasizes on the role of banking system to support the country’s economy and highlighted the necessity of a development strategy in banking and monetary regulations for supporting the economy’s real sector.
Many economists are on the view that the banking sector is responsible for funding up to 85% of economy, said Ghassemi. Additionally, he recognized the banks’ funding as the only source for Iranian enterprises, which cannot be replaced with the capital market in current circumstances with only 15% of funding portion. This remind us of the significance of revising capital market regulations, said Ghassemi. On the other hand, the banks need to take care of their financial situations and respond to their shareholders and depositors properly. So, they have to maintain sufficient supervision on the facilities they grant to businesses, added Bank Pasargad’s CEO. He gave examples of SMEs working under support of MIDHCO- a Bank Pasargad’s mining holding- and claimed those SMEs, which receive banking facilities under control are more firm and profitable and thus, can provide the country with sustainable employment and growth. Ghassemi also gave examples of Japanese and German giant banking holdings, which support their financial and industrial subsidiaries in a well-organized direction.
Dr. Ghassemi additionally defined these supervisions as a part of Islamic Usury-free Banking Regulations and stated that the regulations allow the banks to invest in four categories of enterprises: Those working in banking and financial services, Enterprises acquired due to their debts, Private sector enterprises, which could not meet their obligations and were bailed out to the banks, and finally Enterprises, which private sector cannot fund due to the huge amount of investment needed and high risks.
Furthermore, Dr. Ghassemi affirmed that the financial crisis between 2007 and 2008 was not caused by the banks investments in their subsidiaries. The crisis arose when the bankers did not observe the regulations and entered high risk fields of investment, Ghassemi concluded.
Finally, Dr. Ghassemi gave statistics of profitability and employment attained by Pasargad Financial group and counted a dozen of the bank’s awards achieved by remarkable indices such as CAR, ROE, and the amount of Tier-1 capital.