Cabinet Bylaw Lets Government Settle Up to 100 Trillion Tomans of Bank Debt With Treasury Settlement Bonds

Mehr News Agency reported on Sunday, November 1, 2026 (10 Aban 1405) that First Vice President Mohammad Reza Aref has communicated the executive bylaw on settling debts owed by the government and state companies to banks and credit institutions, which the cabinet approved at its session on October 18, 2026 (26 Mehr 1405). Under it, the Economy Ministry may settle up to 1,000,000 billion rials (100 trillion tomans) of final, audited government debts to banks by issuing settlement bonds.

The mechanism works as follows: banks that owed the central bank principal and interest on credit lines through the end of 1404 can use second-type treasury bank settlement bonds to offset their claims on the government against what they owe the central bank, and the bonds' value is booked as government debt to the central bank. The bonds carry no interest and no purchasing-power protection. The central bank must tell the Economy Ministry and the Plan and Budget Organization how much each institution owes within two weeks of the notice, and any unused quota will be reviewed at the end of Dey. Claims arising from loans made out of the Foreign Exchange Reserve Account and the National Development Fund are not eligible.