25922
Bracing for Int’l Banking
Economy, Business And Markets

Bracing for Int’l Banking

As the economic and banking sanctions begin to fade, Iranian banks can reopen overseas branches which can and should support commerce with the outside world, however, the move would, among other things, demand adaptation to and conformity with the international banking system.
 “The sanctions undermined our economic relations and widened the gap between Iran’s banking industry and global banking,” a top finance and banking expert told IRNA.
 Heidar Mostakhdemin Hosseini referred to the pitiable GDP growth and said, “One effective way to achieve decent growth rates is a capable efficient banking system through which manufacturers and businesses interact with foreign banks.”
 Tehran has been under international sanctions for more than two decades over its nuclear energy program the western powers claim is a cover for building a nuclear weapon. Tehran has strongly denied the charge. A long-awaited agreement was signed in between Iran and the six world powers in July that puts temporary constraints on Iran’s nuclear program in return for relief from economic and financial sanctions.

  HR Factor
 Hosseini said the local banks must make adjustments to meet international standards before the complex process of removing the sanctions starts as expected by early next year.
 “Due to local banks’ lack of professional and skilled human resources, it is for the Central Bank of Iran to initiate crash programs and intensive courses for bank employees.”
 During the four-to six months leading to the lifting of sanctions, planning for the return overseas and robust training for the bank personnel and updating them with international banking regulations should top the CBI agenda, he added.
 Moreover, banks need to hire qualified agents because the 10-year gap (since sanctions were imposed) has changed the criteria for appointing and operating as agent representatives. “So, local banks should move to also perform as representatives of foreign banks as well as upgrade their own agency offices.”
 The prominent finance expert warned that “International banks now have stringent rules for money-laundering and other criminal activities, which our banking frameworks visibly lack.”
 It is worthy of mention that finance and monetary institutions across the world, especially in Europe, have developed new regulations for foreign bank branches that are not compatible with Iran’s banking norms. According to the new laws, banks cannot set up shop on their own volition because branching right is subject to reciprocity.
 Furthermore, branches are obliged to operate independent of their central office and abide by the host countries’ regulatory and monitoring structures.
  Changing Rules
 “In the past banks were free to establish their branches overseas and the subsidiaries were under the purview of headquarters…Now the rules of the game have changed to the extent that the host country’s central bank can now approve or reject the branch managers.”
Normalcy in relations with international banking will “boost economic activity, improve quality to meet global standards, lift non-oil exports, help manufacturers’ easy access to raw materials, facilitate export and import without concern over the transfer of money and level the playing field for business transactions.”
  Hosseini underscored that the return to international banking will also demand both hardware and software reform. “SWIFT, the international electronic payment system is a step toward entering the international arena, but it must be accompanied by other instruments to help produce meaningful GDP growth and verifiable results.”  
  Last week CBI chief Valiollah Seif said Iranian banks will soon reopen branches overseas as part of banking and monetary sanctions relief. “Prospects will improve for issuing securities, foreign loans, rejoining SWIFT, engaging in dollar-based barter trade and export credit guarantees, appointing business representatives, issuing L/Cs and buying international bonds,” he told a press conference.

 

Short URL : https://goo.gl/onkQkN
  1. https://goo.gl/IgVRwN
  • https://goo.gl/EkdaAd
  • https://goo.gl/3KkEKo
  • https://goo.gl/UW7RRk
  • https://goo.gl/T9DpYW

You can also read ...

Turkey Determined to Protect Companies From US Sanctions
Turkey will take every initiative to protect its companies...
Westminster Group Hopeful Over Iran Airport Security Deal
UK-based company Westminster Group PLC is still hopeful it can...
Further Hike in Unified USD Rate
The Central Bank of Iran has increased the US dollar's...
Tesla’s Gigafactory in Nevada, the US
Tesla Inc has flown six planes full of robots and equipment...
Head of Sistan-Baluchestan’s Ports and Maritime Organization Behrouz Aghaei (L) shakes hands with Managing Director of Life Trade Promotion Company Mohammad Arazesh after signing the agreement on May 23.
Life Trade Promotion Company signed an agreement with Sistan-...
No Change in Citroen’s Iran Strategy
In the face of Washington’s withdrawal from the historic...
About 60% of the total volume of NPLs in Iran are considered irrecoverable.
Iranian banks and credit institutions held a total of about 1....
Fiat Chrysler Recalls 4.8m Vehicles
Fiat Chrysler is warning the owners of approximately 4.8...

Trending

Googleplus