Top Administrative Court Bans Forced Blocking of Bank Loan Funds

According to Bourse News, Iran's central bank said on Thursday, September 3, 2026 (12 Shahrivar 1405), that under a ruling by the General Assembly of the Administrative Court of Justice dated 5 Khordad 1405, banks and non bank credit institutions are banned from blocking part of the funds they lend, and from forcing a borrower to open a cash account and pledge it before a loan is disbursed.

Under the ruling, a borrower may still voluntarily pledge a term deposit as collateral, under a 2001 law that exempts borrowers from having to pledge real estate, as long as the bank pays the deposit's full applicable interest rate; paying a lower rate is treated as a violation subject to central bank supervisory action. As a result, clause two of central bank circular No. 375517, dated 23 Esfand 1400, was struck down and revised.