Latest figures by the Central Bank of Iran (CBI) shows loan-to-deposit ratio in the country’s banking system increased slightly in the calendar month to May 21, a sign of boost in lending into an economy still grappling with the double burden of the coronavirus and the US sanctions.
CBI figures cited in a Monday report by the official IRNA agency showed that loan-to-deposit ratio in banks had increased to 81.6% in May, up 4.6% against May 2020 and 1.4% higher than figures reported in the end of past calendar year in late March.
The report said minimum legal deposits held by the banks in the CBI were excluded from the calculations except to foreign currency deposits which are not required to be backed by other securities or deposits.
Iran has no clear loan-to-deposit ratio requirement and commercial banks are constantly encouraged to provide more lending to private and state economic actors.
CBI tables showed that loan-to-deposit ratio in the banking system in the province of Tehran, where the capital is located, reached 95.8% in May while in some other provinces loan figures exceeded the sum of deposits.
The figures showed that total deposits held in the banking system, including the credit institutions, rose by 47.3% year on year against May last year to 43,093.3 trillion rials (nearly $156 billion).
Loans also rose to 31,026.2 trillion rials (nearly $115 billion), up by 55.5% against May 2020, said the CBI.
The bank said over 60% of the deposits and nearly 70% of the loans had been processed in banks in the province of Tehran. It said the reason was because major companies and businesses based in other provinces normally use the banking system in the capital where their offices are located.