Articles of association
Articles of Association of the Deposit Guarantee Fund of Islamic Republic of Iran
Chapter1. General provisions and definitions
Article1. The following terms have been used in this statute:
Articles of Association: Statutes of the Deposit Guarantee Fund of Islamic Republic of Iran.
Central bank: Central Bank of Islamic Republic of Iran.
Fund: Deposit guarantee fund of Islamic Republic of Iran.
Credit institute: Bank or non-bank credit institution established according to law or authorization of central bank which is under supervision of central bank.
Depositor: Person who attempts to deposit with credit institute.
Branch of foreign bank: Operational unit of a foreign bank which conducts banking operation in Iran with authorization and under supervision of central bank.
Membership premium: Payments made to Fund by credit institute according to council of ministers' decree and proportional to financial turnover of the institute.
Emergency committee: A committee constituting governor of central bank, a member of supervisory board of supervision department of central bank. General Director of supervision on banks and credit institutes of central bank and Director of the Fund.
Article2. The Fund is established in form of a non-governmental public institution for unlimited duration and for the purpose of guaranteeing reimbursement of funds belonging to depositors in case of bankruptcy of credit institutes.
Article3. The Fund Headquarters is domiciled in Tehran, Iran and does not have any branches in Tehran or any other locations in the country.
Article4. The fund was founded with Iranian citizenship and is an independent
legal entity and has administrative and financial autonomy and operates based on provisions of this statute and other related laws and regulations.
Chapter2. Duties and powers of the Fund
Article5. Duties and powers of the Fund consist of the following:
Guaranteeing of deposits of any person, in local or foreign currency, in any credit institute.
N.B. Deposit guarantee ceiling for each depositor shall have the approval of council of ministers proposed by board of trustees.
Receiving "premium" from credit institutes.
Refunding of deposits after declaration of emergency committee.
Investment in financial bonds guaranteed by central bank or government up to a maximum ceiling of 70% of the Fund resources and only when resources of the Fund are free and there is no commitment on the obligations of the Fund. Purchasing of the mentioned bonds is only authorized on their last sales day.
N.B. In case of insufficiency in resources of the Fund to fulfill obligations, central bank shall provide portion of the Fund resources in form of facilities after obtaining approval of management board of central bank and council of ministers.
Chapter3. Pillars of the Fund:
Article6. Pillars of the Fund are as follows:
Board of trustees
Board of directors
Chief Executive Officer
Article7. Fund board of trustees consists of 6 members as follows:
Governor of central bank as chairman of board of trustees.
Minister of economy and finance or his deputy.
President's deputy for strategic planning and monitoring or his deputy
A member of supervisory board of supervision department of central bank
One of managing directors of government banks chosen by minister of economy and finance.
One of managing directors of non-government banks chosen by minister of economy and finance.
B. The tenure period of each of the mentioned representatives in subsections (e) and (f) is two years and their re-appointment is permitted.
Article8. Meetings of board of trustees of the Fund are made official by invitation from chairman of the board and by participation of at least five members and decisions of the board are valid by 4 votes. Board of trustees has a meeting at least once a year.
Article9. Duties and powers of board of trustees as the highest constituent of the Fund with compliance to relative rules and regulations are as follows:
Determining policies, courses and plans of the Fund and supervising its activities.
Studying the annual performance report of board of directors and legal inspector and making appropriate decisions.
Studying and approving annual budget of the Fund proposed by the board of directors as well as financial statements according to legal inspector's report.
Studying of structure and organization of the Fund and its future changes.
Nomination and dismissal of members of board of directors proposed by chairman of board of trustees.
Determining fees and remunerations of members of the board of directors, president and legal inspector proposed by chairman of board of trustees.
Studying and making decision on referring claims to arbitration and reconciliation, proposed by board of directors.
Determining a highly circulated newspaper for publication of all Fund advertisements.
Making decision regarding any other subject raised by chairmen of board of trustees or board of directors of the Fund which according to law and statue of the Fund is in capacity of board of trustees.
Artide10. The board of directors including a chairman, four main members and a substitute member is held to handle the Fund's administration within the provisions of the statutes and decrees of board of trustees. Members of board of directors are appointed by chairman of board of trustees' proposal and approval of board of trustees and by chairman of board of trustees' decree for a period of three years. On their first meeting, the board of directors appoints one of the members as chairman of the board.
Members of board of directors should be chosen from experts and experienced people in fields of monetary affairs, banking, economics, law, finance and planning with minimum of 10 years of related experience and at least a related bachelor's degree.
One month prior to term end of members of board of directors, board of trustees move to appoint new members for board of directors. Until appointment of new members, previous members continue to serve their duties.
In case of resignation, passing away or dismissal of any members of board of directors or presence of other legal obstacles, based on proposal of any of members of board of directors, legal inspector or chairman of the board of trustees, the board of trustees meet immediately regarding completion of members of board of directors. In this case appointment of new member or members is for rest of the board of director's term and responsibilities of other board members remain in force until appointment of new members.
Article11. Board of directors meets at least once a week at Fund location based on invitation by chairman of board of directors or president of the Fund. For every board of directors meeting a dated minute should be prepared consisting of
summary of negotiations and decisions made and should be signed by all members.
Board of directors meetings are made official by presence of majority of members. Board of directors' decisions is valid by majority of members' votes.
Opinions of any members of board of directors opposed to all or parts of decisions inserted in the minute must be included in the minute.
Artide12. Duties and powers of board of directors are as follows:
Implementation of the statute and approvals of board of trustees.
Studying and approving the budget as well as financial statements, Fund’s annual operations and performance report for submitting to legal inspector and board of trustees.
Studying and handling of reports by legal inspector, internal control department and also reports concerning three months performance of the Fund which is presented by the president every three months. Should the president fail to present the reports subject of this section on time, board of directors has the duty of taking quick and effective action regarding obtaining the said reports.
Making decisions regarding signing any kind of contract with individuals or legal entities whether governmental or non-governmental and their alteration, transformation, termination and bilateral discharge and also purchase, sales and exchange of goods and real estate in Fund's account and other decisions regarding the subject in framework of approvals made by board of trustees and with compliance to related rules.
Making decisions regarding opening account with credit institutes and using the account in the name of the Fund.
Establishing of internal audit system and setting up a suitable internal control system.
Presenting proposal to board of trustees for referring claims and disputed cases to arbitration and for reconciliation.
Making decision on doubtful or irrecoverable receivables of the Fund.
Proposing maximum limit for premiums paid by credit institutes to central bank through board of trustees.
Studying and making decision regarding investment of Fund resources in framework of statute context and approvals of board of trustees.
Organizing payment of guaranteed funds of deposits according to available regulations, context of this statute and approvals of board of trustees.
Studying and approving proposals put forward by the president regarding establishing communication, exchange of information and experience and if necessary, signing of agreement with related international organizations including deposit insurance institutes in other countries in framework of provisions of laws and regulations available.
Continuous supervision on collection of receivables of the Fund and payment of its liabilities.
Decision making regarding all affairs placed on board of directors' agenda by president within his scope of authority or by board of trustees.
N.B. With maintaining responsibility, board of directors can delegate some of its duties to President.
Artlclel3. Chief Executive Officer is considered as the highest executive and administrative authority of the Fund who is appointed by proposal of board of directors and approval of board of trustees and approval and decree of chairman of board of trustees and his dismissal takes place by proposal of board of directors and or governor of central bank and approval of board of trustees.
President of the Fund cannot be chosen from members of board of directors. Articlel4. Duties and powers of president are as follows:
Executing the decisions of board of trustees and board of directors.
Administrating current affairs in framework of related rules and regulations.
Appointing and dismissing of staff and mangers of the Fund with compliance to related rules and regulations.
Codification of administrative, employment, financial and trading bylaws for presenting to authorities for approval.
Preparation and codification of Fund structure for presenting to board of directors and establishing of the approved structure and organization and making it operational.
Being the representative of Fund against individuals or legal entities, courts and other judicial authorities with the right to appoint a substitute for himself.
Taking measure for reconciliation, referring to arbitration and appointing arbitrator and expert with compliance to principle 139 of the constitution of Islamic Republic of Iran and other related regulations.
Preparing and arranging annual plan and budget, financial reports and statements, report on periodic performance of the Fund for presenting to board of directors.
Taking action regarding collection of receivables and Fund credits and payment of Fund debts.
Presenting report regarding recognition of doubtful receivables to board of trustees after approval of board of directors.
proposal regarding establishing communication, exchange of information and experience and if necessary, signing of agreement with related international organizations including deposit insurance institutes in other countries and international association of deposit insurance in framework of rules and regulations and approvals of board of directors.
Carrying out duties and powers delegated to president by board of directors.
President can delegate some of his powers to Fund managers or staff with his discretion and responsibility.
President is responsible for proper execution of all Fund affairs and is protector of Fund's rights, interests and properties.
All cheques, promissory notes, bills of exchange and other financial, trade, credit and promissory documents and bonds are valid by signature of managing director, a member of board of directors together with Fund stamp. All ordinary and ongoing contracts and correspondences of the Fund are valid by managing director's signature.
Articlel5. Duties of the legal inspector are borne by the audit organization which should present its reports to the board of trustees.
Artidel6. Duties of legal inspector are as follows:
Continuous supervision on proper execution of Fund's statute context.
Adaption of Fund's operation and expenses with related regulations.
Studying and commenting on financial statements, Fund books and operations and providing the board of directors with his opinions.
Studying and commenting on affairs delegated from the board of trustees.
Commenting on accuracy and anomaly of reports of board of directors to board of trustees.
Articlel7. In performing his duties, legal inspector addresses all Fund documents, assets and accounts without interfering in the ongoing affairs of the Fund and can access Fund information, papers and documents he deems necessary with a written request to managing director. Fund's president is bound to take action regarding replying to legal inspector 's written request at the earliest.
In case legal inspector observes any problems during his audit or receives reports concerning violations of related rules and regulations or problems at the Fund, he is bound to notify the president in writing regarding the cases. In case no action is taken to solve the said problems, he should report the subject to the board of trustees.
Chapter4. Financial regulations
Articlel8. Financial year of the Fund starts on first of Farvardin (March 2l“)
every year and ends on the last day of Esfand (March 20,th of the next year of Gregorian calendar) of the same year with the exception of first year of establishment when the financial year is from date of commencement to end of month of Esfand of the same year.
Articlel9. Fund's financial statements and accounts are regulated and kept according to accounting standards.
Article20. %30 of remaining resources of the fund which are not in any way investable together with other Fund resources that are not used for investment are kept in an account with central bank.
Article21. Board of directors is bound to regulate Fund's proposed budget for the next year and submit it to board of trustees by the end of month of Azar (December 21s1) at the latest every year.
Article22. Board of directors is bound to provide legal inspector and board of trustees with annual financial statement of the Fund consisting of financial statements together with report on activity, general status and annual performance within maximum of two months after end of financial year.
The inspector is bound to provide board of trustees with a copy of his opinions about annual financial statements, financial statements and statements of assets and liabilities one month prior to meeting date of board of trustees.
Approval of Fund's financial statements by board of trustees is regarded as clearance of president and board of directors regarding performance of the considered financial year.
Article23. Fund's excess of revenue over expenses in every financial year is deposited into Fund's account after due process.
Chapter5. Other regulations
Article24. The Fund shall pay for deposit funds subject to guarantee through one of credit institutes and within twenty days after declaration of emergency committee and according to approved guideline of board of trustees.
Article25. The Fund is considered as creditor of the relevant credit institute for the payment of guaranteed deposits amount. For this purpose, before proceeding to pay credit institute's depositors with deposits subject to guarantee, the Fund adopts a mechanism so that with written agreement of the relevant credit institute and each of the depositors, all the rights related to claims of depositors from the relevant credit institute, up to the amount limit paid to them, would be transferred to the Fund.
Article26. After issuance of bankruptcy decree for the credit institute by the court, Fund will commence payment of deposits of credit institute's depositors.
Artide27. President of the Fund is bound to notify managers of the credit institute and central bank's representative or the liquidator of the amount of fund paid to each depositor.
Article28. For sake of transparency and increasing public awareness, Fund's board of directors can publish Fund's annual performance report not bearing any banking or trade confidential information.
Article29. Members of the board of trustees, board of directors, legal inspector, managing director, Fund staff and those staff of central bank or others who in any way have access to Fund information, are bound to take necessary cautions in not disclosing the Fund information which is considered as confidential.
In case of any discrepancy between the Persian version and the English version of the material, the Persian version shall prevail.