Bank Melli in Nishapur, Iran. (Wikipedia/Jamal Nazareth)
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A move by Iran to recover bad debts on behalf of banks has shed light on possible corrupt lending under the country's previous president and also suggested a fresh spirit of cooperation among its various centers of power.President Hassan Rouhani's administration, in power for nine months, says bad debt in the banking system has reached a "critical" level – 15.6 percent, according to the central bank – and has pointed the finger at cronyism under Ahmadinejad.The list has not released but some believe the bulk may have been borrowed by as few as 100 people and firms, suggesting some have debts running to many millions.Announcing the move to call time on big defaulters, Vice President Eshagh Jahangiri estimated the amount of bad debt in the banking system at 820 trillion rials ($33 billion), the official IRNA news agency said.State-owned Bank Melli, Iran's largest lender, held $12 billion or 35 percent of all bad loans in 2013, the Hamshahri newspaper said.Ahmadinejad's administration belatedly tried to temper the problem by dipping into Iran's sovereign wealth fund to offer new credits to stimulate the economy, in the hope that the move would let debtors earn new income.
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