The Survey of Concept and Necessity of Syndicated Loans in Iran's Legal System

Banks play an important role as an intermediary in the financial system between the lenders and applicants of financial sources. They absorb the financial sources of customers and present them to applicants. Their financial relations are arranged on the basis of the credit rating of their applicants. The financing restrictions and complexity of banks relations and inherent risk of financing have made the banks to design a model to fund their financial sources and distribute their various risks. One of these models is financing by using syndicated loans. Since most of the big projects need a high amount of financial sources, the use and significance of syndicated loans is increasing. In this paper, we tried to examine the concept and structure of syndicated loans by using an analytical and descriptive model which explains the necessity of using this method in the legal and economic system of Iran. We concluded that the main reasons given for non-use of this method are the lack of adequate legislations in this field and the absence of information transparency in the contractual structure of such credits as well as the legal rules governing relations between syndicate members.