Iran's state-dominated banking system has $48 billion in non-performing loans and it is on the verge of a crisis, the Islamic Republic's central bank governor said in comments published on Monday.

'How would it be possible for the banking system to show any profit with $48 billion worth of loans in arrears,' the Ettelaat newspaper quoted Governor Mahmoud Bahmani as saying.

Referring to a lending spree in recent years, he said: 'Of course, the reality must be accepted that the opening up of the banking system's resources sack in the past few years has brought them (the banks) to the brink of crisis.'

Iranian governments have in the past often instructed state banks to provide low-interest loans to various sectors in order to boost the economy, saddling the banking system with non-performing loans.

Separately, a pro-reform daily said a shortage of cash at some state bank branches in Tehran and the city of Isfahan on Saturday and Sunday had caused queues and 'tension and anger' among customers. The Bahar daily did not give a reason for the cash shortage.

There was no immediate comment from officials on the report.

Citing witness reports from an unnamed bank branch in western Tehran on Sunday, Bahar said: 'The customers were told there was no cash ... the bank's doors was eventually closed to customers, as a result of which a customer was injured.'-Reuters