Iran's central bank has instructed commercial banks to report customers who obtain loans using forged documents or divert borrowed funds from their approved purpose, stepping up enforcement of anti-corruption rules in the banking sector.

As per a directive issued by the CBI's legal affairs department, banks must refer suspected violations to the secretariat of the Anti-Corruption Committee at the State Inspectorate Organisation without delay. Cases involving large loans or those already subject to final court rulings will receive priority.

The order is based on Iran's Law on Promoting Administrative Integrity and Combating Corruption, which classifies the submission of fraudulent financial statements, tax declarations or other documents to obtain bank credit as an offence. The law also prohibits borrowers from using bank facilities for purposes other than those specified in their loan agreements.

The central bank said banks are legally required to monitor how loans are used after disbursement and report any violations to the relevant judicial and supervisory authorities.

Individuals found to have obtained credit through fraudulent documentation or to have misused loan proceeds may lose access to banking facilities and other state benefits in addition to facing legal action.

The directive also reminds bank officials that failure to report suspected economic crimes could expose them to criminal penalties under Iran's anti-corruption legislation.

The move forms part of the central bank's broader effort to tighten supervision of bank lending, improve oversight of large loans and reduce abuses that have contributed to rising non-performing loans and governance problems across Iran's banking sector. Besides there has been many cases of attempts to take out loans using fake documents across the country.