Economy, Business And Markets

Banking Sector Set for Normal Int’l Business

Banking Sector Set for Normal Int’l Business Banking Sector Set for Normal Int’l Business

Iran's banking relations with the outside world will be normal soon after the lifting of sanctions, Valiollah Seif, governor of the Central Bank of Iran said Sunday. Foreign banks and financial institutions declined cooperation with their Iranian peers in the past due to hefty fines imposed largely by the United  States ostensibly for violating the sanctions regime against Tehran, he said.

"We had a few channels through which we could connect to the international banking system. However, these indirect methods cost us dearly and were insecure, sometimes even leading to sizable losses. The final price of imported goods shot up while our international economic relations took a heavy toll."

The CBI governor pointed to the nuclear deal between Iran and six world powers in July and stressed its positive impact on the spluttering economy, IRNA reported.

He highlighted what he considered to be the "two high points of the nuclear accord" with the so-called P5+1 (the five veto powers of the UN Security Council plus Germany): "The first was when the Security Council terminated previous resolutions against Iran. And the second came a few days ago when the International Atomic Energy Agency closed the PMD (possible military dimensions) case on Tehran's past nuclear activity."

Banking Ties with Algeria

Seif who visited Algiers last week to discuss banking relations said the agreements reached would serve as a prologue for expanding wider economic ties with the North African nation.

He had accompanied First Vice President Eshaq Jahangiri on a visit to Algeria last Wednesday. In September an Algerian delegation headed by Bank of Algeria’s governor visited Tehran to explore venues for expanding bilateral economic and banking ties.   

Seif referred to a MoU which was signed in Tehran that included cooperation between the two countries' central banks serving as correspondent banks for each other.

 "We had proposed the establishment of a joint bank to help improve economic transactions between the two sides. The CBI had also tabled a proposal for establishing a joint account for settling collateral issues encountered by Iranian contractors in the country."

Seif said during the visit to Algeria a joint committee was formed to accelerate the re-link Iranian and Algerian lenders. The committee will hold its first session next week.

"An Iranian delegation accompanied by CBI representatives will visit Algiers next week to prepare the grounds for a new phase in bilateral banking ties."

In September's visit Seif had announced that Iranian banks are willing to open branches in Algeria while the CBI would support Algerian banks interested in operating in Iran.

Relations between Algeria and Iran have historically been cordial with the former mediating successfully to end the US hostage crisis in Iran in 1981 and the Iran-Iraq border dispute in 1975. The agreement that led to the release of the 52 Americans, which Tehran had accused of spying, came to be known as the Algiers Accord.