Saman Bank, a major private bank in Iran, has converted only 21.8% of its available interest-free (qard al-hasanah) resources to loans, according to its audited financial statements for the year 1402 (2023-2024), Iusnews reported on September 27.

The bank's total available interest-free resources, after deducting legal reserves and liquidity provisions, amounted to IRR167.94 trillion ($4bn official rate). However, the total outstanding interest-free loans at the end of the year stood at only IRR36.6 trillion ($871mn official rate).

This comes despite the Central Bank of Iran's directives requiring banks to allocate interest-free resources for marriage and childbirth loans as part of the annual budget mandate.

Saman Bank's interest-free savings deposits totalled IRR86.56 trillion ($2.06bn) at the end of 1402.

When current account deposits are included, the bank's total interest-free resources reached IRR285.92 trillion ($6.81bn).

The report notes that while state-owned banks and banks with government shareholding have allocated a significant portion of their interest-free resources to such loans, some private banks, including Saman Bank, appear to be less compliant with the regulations.

This low conversion rate of interest-free resources to loans at Saman Bank raises questions about the implementation of central bank policies aimed at supporting marriage and population growth through the banking system.