Economy, Business And Markets

CBI Willing to Revamp Banking Sector

CBI Willing to Revamp Banking Sector CBI Willing to Revamp Banking Sector

Tehran is determined to revive banking ties with Sweden in the post-sanctions era, the governor of the Central Bank of Iran, Valiollah Seif said on Sunday. Pointing to the two countries' close banking relations prior to the sanctions, Seif called for attention to the fact Iranian banks have always met their financial commitments and obligations to their foreign counterparts.

"Iran's banking sector could be upgraded in cooperation with European lenders and Iranian banks are doing their best to meet the international banking standards such as Basel II and III," Seif said in a meeting with the visiting Swedish Minister of Corporations and Innovation, Mikael Damberg.  

The senior banker highlighted the importance of a well-regulated and efficient banking industry in preparing the ground for reestablishing global economic ties, CBI's website reported.  He asked the government in Stockholm to restore Iran's credit ranking to the pre-sanctions era.  

Seif touched upon the havoc that decades of sanctions created for the Iranian economy and said the government had done a "commendable job" in managing the economy saddled by the sanctions, especially in the past two years.

"We managed to pull the economy out of recession, rein in a whopping inflation and achieve a 3% growth all at the same time. Prospects for next year are better as we expect a growth rate of over 5% and single-digit inflation."

Damberg pointed to the long history of Iran-Sweden economic relations, expressing his country's interest in expanding banking ties with Iran.

"Swedish companies are interested in cooperating with their Iranian counterparts specifically in the fields of transportation, mines and ICT," he said.

The Swedish minister took note of Iran's economic and investment potentials and said his country is interested to invest in international markets like Iran. "We believe in a sustained and long-term cooperation and Iranian banks have taken good steps in this regard."

Expanding Ties

The Swedish delegation also met with the Iranian minister of communications and information technology, Mahmoud Vaezi. Vaezi stressed Iran's willingness to expand ties with Sweden in the areas of training and research, especially in industrial sectors. Vaezi said the Swedish commercial office will open in Tehran before the year is out.

The senior Iranian official pointed to the presence of the Swedish export credits guarantee board, EKN, and several Swedish banks like AB in the visiting delegation and said "Opening a credit and finance line can accelerate the next steps in revitalizing ties between the two countries."

Daniel Lorentzon, vice president and client executive of bank relations at Swedbank AB told Bloomberg earlier that Swedish exports to Iran could rise seven-fold once the sanctions are lifted. He added that his bank wants to provide financing for exporters and is also studying how it could enter Iran after the restrictions are lifted.

"Ideally, we will be able to go directly instead of using an intermediary such as Dubai," he said.

Sweden’s biggest companies and banks, including the telecommunications firm Ericsson AB and truck and bus producer Scania AB, want to invest in Iran after the economic sanctions are lifted following the nuclear agreement with world powers.

“We are ready,” Scania spokesman Hans-Aake Danielsson said back in October, “If and when it takes off, Iran can be a significant market for Scania."