Legal Description and Scope of Temporary Administration of Banks or Credit Institutions

Abstract

Banks and other credit institutions can face crises during their operations. The institution of temporary administration or conservatorship is one of the methods of restructuring banks and other credit institutions in times of crisis. The purpose of this study is to identify, legal description and explain the territory of temporary administration. Finally, while defining, legalizing and explaining the scope of this institution, we reached the following conclusions: First, in the event of several circumstances, such as the suspension of a bank or credit institution, the regulator, such as the central bank, either directly takes over the management of the bank or the credit institution or delegates it to another person. Secondly, temporary administration is basically a kind of imposed and compulsory agreement arising from the law and public order. Thirdly, not only with banks, it is possible to implement the conservatorship for other credit institutions, such as credit cooperatives, leasing companies, exchange offices, Gharz al-Hasna funds and even insurance companies, Rather, the scope of the temporary administration is not limited to the management of deposits by the guarantor bank or credit institution, and for various reasons, has a wider scope, and the comprehensive administration covers all property and all matters. This analytical view of the issue can provide approaches to the legislature and the courts in the discussion of the temporary administration of a credit institution by another credit institution and fill its gaps in the Iranian banking legal system.

Keywords

• conservatorship
• temporary administration
• bank
• insolvency
• credit institution