Electronic Collateral Management System Unveiled to Iran Capital Market Beneficiaries
On Monday July 27 2022, the first phase of the Electronic Collateral Management System was unveiled to all stakeholders and beneficiaries of the Iranian capital market during a ceremony in the capital Tehran.
Iran's Attorney General, the economy minister, the judiciary officials and managing directors of the banks involved in the project were present in the ceremony hosted by Central Securities Depository of Iran and Securities and Exchange Organization.
In an address to the ceremony, CSDI Chief Executive Officer, Mohammad Baghestani, said "In line with a successful digital transformation strategy, Central Securities Depository of Iran in collaboration with various bodies and organizations including the the Ministry of Economic Affairs and Finance, Securities and Exchange Organization and Tehran Securities Exchange Technology Management Co. has offered the cutting-edge technology of electronic Collateral Management System."
Baghestani said during the first stage of the project, the operating banks could facilitate and speed up the process of validating and lending loans to their customers using the online service of collateralizing applicants' shares through the Electronic Collateral Management System.
Online Collateralization Process
According to Baghestani, the applicants can electronically submit their requests to pledge the shares they own on the stock market without having to sell their shares.
The CSDI CEO said, traditionally pledging securities was not popular among stakeholders because it required a lot of paperwork and was a time-consuming procedure.
However, recently thanks to the Electronic Collateral Management System, pledging shares by shareholders in exchange for loans have become an increasingly prevalent financing channel.
Since last year, some 300 thousand stakeholders have successfully enjoyed this service. This as nearly 6 thousand people have successfully released their collaterals electronically.
Advantages of Electronic Collateralization
Thanks to the Electronic Collateral Management System, all people can easily use this service online from all over Iran using this electronic platform.
However, it should be mentioned that the applicants should primarily be registered in the e-KYC platform of CSDI i.e. the Comprehensive Information Gathering System (CIGS) and have their identities verified in order to benefit from dozens of services offered through CSDI's Integrated Portal for Capital Market Stakeholders (DDN) including the electronic procedure to pledge their securities so that they can apply for loans in the banking system.
The new Electronic Collateral Management System provides services to capital market stakeholders within the electronic banking networks.
This platform is totally online and stakeholders can use the system easily just as a simple online shopping through their mobile net banking applications or the official website. They simply choose and submit the share they intend to pledge and the request is finalized once Central Securities Depository of Iran approves it.
In the near future, the stakeholders can use gold coins, life insurance fund, certificate of deduction from salary, etc. as collaterals to benefit from services that require collaterals using this platform.
Release Date: 7/27/2022