Merger of banks; An action to reform the banking system

According to the IBNA correspondent, the project of merging banks affiliated with the Armed Forces in Sepah Bank has finally been completed, and on Sunday, Abdul Nasser Hemmati, the governor of the Central Bank, announced in his Instagram message that the project was completed after two and a half years. Thus, the merger of banks affiliated with the Armed Forces in Sepah Bank will show that by eliminating additional branches, irrational competition from the monetary and financial space of the country will be eliminated and the task of the banking system will be better performed.

Abbas Ali Nouri, a university professor and economics expert, told IBNA about the merger of banks affiliated with the Armed Forces: “Unfortunately, in recent years, financial institutions that later took the name of the bank without any scientific basis, based only on economic or political power.” They grew like mushrooms in Iran and even chose holy names to make them difficult to criticize. This caused the number of banks inside Iran to increase without implementing the main reasons for their creation.

He added: “One of the main reasons for inflation has been the increase in the number of banks in any form.” Because they did not pursue any specific goal in the country’s economy and only considered their profit. These banks increased credit money, which in itself was inflationary. After about a few years, they decided to merge them.

The university professor reminded in this regard: The bank is the economic engine of any country and when it is established, along with its financial interests, it must move forward for the economic goals of the country. Of course, it is true that sometimes they repaid Qarz al-Hasna loans, but they even did it in profitable ways, which marginalizes the issue of being Qarz al-Hasna.

“The issue of merging banks is good if it starts the engine of economic development, but if it is enough to just change their name, it will not change the status quo,” he said.

Nouri said that the merger of banks affiliated with the Armed Forces is the beginning of reforming the country’s banking system, adding that reducing the number of banks by the Central Bank is a good thing. In addition to the above, it should be borne in mind that the country’s banking and monetary system is changing towards digitalization and this number of employees will no longer be needed.