Iranian media reports show that many banks and credit institutions are violating a decision made last June by the Money and Credit Council, the highest policymaking body of the Central Bank of Iran, in regard to the interest rate for deposits. The council capped the rate at 15% and threatened banks with disciplinary actions should they ignore the decision. Yet 90% of banks have failed to comply with the mandate since then, leading economic newspaper Donya-e Eqtesad reported June 8.

An unidentified private bank is offering 23% interest on one-year savings accounts, Tasnim news agency reported June 10. Many other private banks have adopted similar policies. Even state-run banks offer higher than the authorized interest on savings accounts, the report noted, arguing that the state banks have been left with no other options as they want to survive in the ongoing race to attract liquidity.

Another report pointed to Bank Ghavamin, affiliated with the Law Enforcement Force. According to Akhbar Bank news website, Ghavamin offered up to 18% interest on deposits that were opened in the month of Ramadan (May 27-June 25).

Most of the banks justify their actions by claiming that they are offering a “special” program for a certain occasion. But in fact, they explicitly violate the regulations. Fatollah Amoli, a staff writer with moderate newspaper Ettelaat, called the looming banking crisis a security threat that could impact the country as severely as possible further Islamic State attacks. The writer criticized banks and the regulator for adopting non-Islamic interest regulations, which could jeopardize the whole banking system.