At the beginning of January, Tehran hosted the most significant economic conference held in Iran since 1979, with President Hassan Rouhani, his economic team and 1,500 economists focusing on economic hardships that have surfaced in recent years.

Akbar Komijan, the deputy governor of the central bank, implied that if the commercial banks do not provide enterprises with loans, the reason would be lack of eligibility of loan seekers, and not a lack of finances.

In the eight months ending Dec. 21, more than 60% of the granted loans were made to address cash flow issues.  The banks have been faced with a massive number of non-performing loans due to the combination of government’s lending directives to support failing enterprises and harsh depreciation of the rial in 2013 against major foreign currencies.

The commercial banks, troubled with a lack of cash, are now left with few options to meet their daily needs. The central bank is complaining that the banks have been borrowing to much from the treasury.   Komijani said at the conference that the banks’ overdraft from the central bank is “inconveniencing” and called on them to find other ways to meet their needs for cash.

A monetary expert in Tehran said the banks usually fail to pay off their debt, given the high interest rate of 32% for such loans. The banks have no choice but to borrow from either the central bank or one another.

Some struggling banks are even given one-day loans by other financial institutions. These loans would let the banks meet their immediate needs for cash. Monetary officials are fearful that they would soon face a desperate situation as the non performing loans cannot be recovered.

Another option the banks could consider to boost their lending ability is to use the money held by the public in the form of gold and foreign currency, which is estimated to be around $21.5 billion.  The amount is more than five times the estimated gold reserves of the central bank, which is nearly $3.9 billion.

Many believe that the lifting of sanctions is a shortcut to prosperity as they have so far blocked the Iranian government from tapping into the reduced oil income.

The lifting of sanctions would let Iran access $100 billion in foreign assets blocked in international banks in one go and resume economic relations with world nations, a move that would give a boost to the economy and the private sector in particular, which is heavily indebted to the banking system. But for now the negotiations are unlikely to result in a swift deal and the government can do little to shore up the stressed banks.

Among the few measures the regulator may take to help recover the sizable NPLs is create a specialized team or entity to address problems of bad debt. If a list of top defaultors connected t politicians were published, this might also improve matters.