Central Bank doesn’t guarantee depositors’ money!

Hatami Yazd (monetary and banking expert)

[In this report, Hatami Yazd (monetary and banking expert) says that the Central Bank has not responsibility towards people who deposit their money in banks and credit institutions. Recently, many of these institutions have gouged people money all over Iran, thus creating a widespread financial crisis.]

TV host: Thanks for accepting our invitation. It has been a while that depositors in financial and credit institutions, credit cooperatives and perhaps even some banks are strongly after withdrawing their money from banks. Some of these cooperatives – as I said in the introduction, such as Fereshtegan and Arman – are in fact not capable of returning these deposits and have announced bankruptcy. But as for other institutes, there is this feeling that depositors will go and withdraw their money from banks and credit institutions. Why is this happening?

Hatami Yazd (monetary and banking expert): Central Bank does not guarantee reimbursing people’s deposits. It doesn’t have resources to do this, nor is it its duty. This in general is true about state and private banks, as well as legal and illegal credit institutions.

TV host: So it doesn’t guarantee people’s money? Then how should people trust banks?

Hatami Yazd (monetary and banking expert): All over the world, no central bank guarantees the banks’ debts to depositors.