TEHRAN - The Central Bank of Iran (CBI) says it will increase the capital requirements for the banks in the country in the calendar year to March to make the sector more robust and avoid the risk of collapse for certain state and private banks.
CBI Governor Muhammad Reza Farzin said that the collective capital held by the banks in Iran would more than double in the calendar year to late March compared to the previous year to reach 12,000 trillion rials ($14.12 billion).
Farzin said no banks in Iran will be able to continue to operate this calendar year with a capital of less than 200 trillion rials.
He said that tightening capital requirements for Iranian banks would enable them to enter the international banking market in case Iran is relieved from sanctions that have restricted its access to global banking services in recent years.  
“Raising the capital adequacy of the banks is a critical issue for the banking system, and even if all the sanctions are lifted, the banks wouldn’t be able to operate in the international banking system with their current financial statements,” said the CBI chief.
Farzin said that state banks in Iran would increase their collective capital by 2,000 trillion rials in the year to late March, adding that they would raise the capital through collecting their debts from Iran’s administrative government.
“The current year would be a decisive year for the (Iranian) banking system, and the CBI would do its utmost to return the banks to banking standards,” he said.
State and private banks in Iran have been faced with a series of sanctions imposed by the United States since 2018, when Washington withdrew from an international deal on Iran’s nuclear program.
Iran and the U.S. have been engaged in indirect talks since early April to work out a deal to lift the sanctions from Iran in return for the country to scale back its nuclear program.