Iran has introduced credit cards for the first time in what appears to be a plan to encourage spending by the public.
The credit cards will be presented to applicants with three limits of Rials 100 million ($3,000), Rials 300 million ($10,000) and Rials 500 million ($15,000). They can be used for purchases in shops or online, the media reported.
The cards have been devised within Murabaha Islamic financing structure. Murabahah by definition involves the purchase of a commodity by the bank, on behalf of the customer, which is to be sold to customer on a cost-plus-profit basis. The profit that the Central Bank of Iran (CBI) has devised for Iran’s Murabahah credit cards is 18 percent. The customers can repay the funds they receive through the cards in 36 installments.
Reports said only two banks – Bank Melli Iran and Ayandeh Bank– had started to issue credit cards.
IRNA reported that Ayandeh Bank alone had issued above 12,000 credit cards on the first day the mechanism had been introduced to the public.
The government of Iran had for months put the promotion of credit cards on its agenda.
Communications and Information Technology Minister Mahmoud Vaezi said in August that the country was preparing to introduce credit card services processed by global payment operator MasterCard for the first time.
Credit and debit cards, accepted in more than 210 countries where MasterCard is valid, will be distributed at financial branches of the Iran Post Company, Vaezi emphasized.
On the same front, the CBI announced in March that it is preparing the grounds for its nation to use credit cards provided by Asian banks such as Japan Credit Bureau (JBC) as well as China UnionPay (CUP).