Iran Fara Bourse Posted
Money and Credit Council – the top body in charge of making monetary and banking decisions – approved a plan dubbed as the ‘productive credit certificate’ better known by its Persian acronym Gam.
It was approved as part of the Central Bank of Iran’s measures to optimize management of liquidity injected into distressed manufactures, the CBI’s website reported.
“Productive Credit Certificate is based on Aqd Zeman. Zeman Contract or “contract of guaranty” by which one person undertakes the debt or liability of another person and replaces the actual debtor relieving the latter from any obligation, hence, the contract being a ‘contract of substitution of the debtor’. Selected banks play roles as the payment agent and guarantor. Gam Securities pave the way to raise working capital of businesses with the help of guarantees provided by banks and credit institutions, and tapping the capacities of the private sector,” said Amir Hamooni, IFB CEO.
“Gam is a tangent point of cooperation between capital and money market. On the capital market side, Gam is oriented by IFB, SEO, and CSDI. Executive guidelines governing the procedure of Gam approved by SEO board earlier this year. As long as Gam is issued and transacted in the money market, securities are just authorized for interbank transfer. After being admitted to the capital market, securities become tradable” he also added.
As above mentioned, Gam is a market-oriented financial instrument that can be traded in money and capital markets. As per the plan, lenders will help credible businesses by offering a tradable credit.
News Link: https://www.ifb.ir/News.aspx?id=118&lang=en