Economy, Business And Markets

Iran Banks Focus on Turkey

Iran Banks Focus on Turkey Iran Banks Focus on Turkey

The preferential trade agreement with Iran, which came into effect in the beginning of the year, paved the way for Iranian banks to enter the Turkish market. After Bank Mellat obtained permission to expand its operations in Turkey in March 2014, Iran's Saman Bank also applied to the Central Bank of the Republic of Turkey (CBRT) and the Banking Regulation and Supervision Agency (BDDK). The BDDK is now considering the Iranian bank's request; BDDK is expected to respond before the year is out, Iranian and Turkish news sources reported.

Iran is considering expansion in the Turkish finance sector. Two major lenders, namely Bank Tejarat and Pasargad Bank, are also expected to reapply for a role in the Turkish finance market after Saman's application is approved. The approval of the expansion request by Mellat, which despite being in the Turkish market since 1982, had not been operationally active in Turkey due to sanctions and took a backseat in 2012, raised hopes for other banks.

According to the Turkish daily Sabah, along with Halkbank, which has emerged as a crucial player in Turkey's trade with Iran, especially in payment for fuel oil and natural gas, Ziraat Bank is expected to be involved in trade after a request from Iranian authorities was delivered to the economy ministry and the customs and trade ministry in Ankara.

Ziraat, which has a representative office like Halkbank in Iran, can also increase its own financial markets by becoming active in Iran. It is said that the growth in the financial sector will also contribute to trade between the two neighbors. Senior officials in the two capitals have often been quoted as saying that two-way trade should increase to $30 billion in 2016.

Leader in Electronic Banking

Saman Bank, established as a credit institution in 1999, had obtained banking license in August 2002. The private financial institution has 149 branches in Iran and enjoys repute as it is the first bank to offer internet banking in Iran. It has also contributed to the development of electronic banking across the country of 80 million people.

Easy Terms for Opening Accounts

Another request by Iran's finance industry is for easier terms for opening accounts in Turkish banks. A senior economic expert who emphasized the Iranian banking sector's willingness to be actively involved in the Turkish banking sector says better terms and conditions are required for banking transactions. Authorities say Iranians are seeking financing for the increasing number of private sector companies in Turkey.

Caption: Saman bank in the second Iranian lender to enter Turkey.