HomeIran News NowIran Economy NewsIran seeks to open doors for foreign banks

Iran seeks to open doors for foreign banks

AFP – Iran’s Central Bank has adopted a directive that would allow foreign firms to set up branches in the Islamic republic and buy stakes in Iranian banks, state media reported on Sunday.

"The directive allows the opening of banks with joint Iranian and foreign investment, the possession of shares in Iranian banks by foreign investors and foreign banks to set up branches in the country," the central bank said in a statement on the state-run IRNA news agency.

It did not say whether there would be an upper percentage limit for the stakes that foreign investors could take in Iranian banks.

Foreign banks currently are allowed to open in Iran only in free trade zones like the southern resort island of Kish and have no branches elsewhere in the country.

It remains to be seen whether the central bank’s decision could pave the way for an important shake-up of the Iranian banking landscape, currently an entirely domestic industry.

The legislation still needs to be ratified by the cabinet and then presented to the parliament for a vote, the bank’s statement said.
The move comes amid US pressure on European banks to cut their business with Iran as part of a package of measures to pressure on Tehran to end its defiance over freezing sensitive nuclear work.

The US pressure on European banking giants has made it harder for Iran to win credit lines for projects. It is not clear whether the central bank’s move is related to this pressure.

The United States has also blacklisted two major Iranian state-owned banks, banning them from carrying out transactions in US dollars.
Washington accuses Iran’s Sepah bank of helping finance the country’s weapons programme and Bank Saderat of supporting terrorism by channelling funds to Islamist militant groups.