Economy, Business And Markets

Iran Relink to Global Banks in Weeks

Iran Relink to Global Banks in WeeksIran Relink to Global Banks in Weeks

Iran is set to reengage with international banking and lending institutions within weeks as they link up with their Iranian counterparts using global transaction network SWIFT, Iran’s Middle East Bank and a senior central bank official told Reuters on Friday.

A nuclear deal between world powers and Iran led to the removal of restrictions on Tehran’s banking, insurance and shipping sectors last weekend, as well as restrictions on oil exports.

But for Iran to resume business with the global banking world - for the first time since 2012 - its banks need to be linked to overseas lenders on SWIFT. The system, the Society for the Worldwide Interbank Financial Telecommunications, is used to transmit payments and letters of credit.

“We have sent almost 40 SWIFTs to different banks around the world and we have requested that now that the sanctions are lifted, we would like to exchange documents and whether they will consider a correspondent banking relationship,” said Parviz Aghili, chief executive and managing director of Tehran-based Middle East Bank. “Some of them have come back and have asked questions, for documents they need.”

“My feeling is it is going to take a couple of weeks or so before we start to see proper reengagement. It will be slowly, slowly,” he said in an interview.

Aghili said other Iranian banks were in the same situation regarding SWIFT as his company, which is listed on the Tehran Stock Exchange and has total assets of around $1 billion.

 “Turned On”

A senior official with Iran’s central bank also told Reuters the transaction links would soon be restored.

“Really, it is a matter of just a few weeks, less than a month. Because all of our banks, whether private or state-owned, have taken the necessary bureaucratic steps, regarding rejoining the SWIFT system,” the official said on Friday.

Aghili added: “SWIFT has been turned on – it has always been on. The main issue has been that we did not have proper correspondent banking relationships with so many banks around the world and because of sanctions, our SWIFTs remained unanswered.”

The CEO also said he did not see the dollar curbs as a major obstacle for Iran’s banks to resume trading. “We can deal in euros, in Swiss francs - all the non-US currencies,” he said.

Middle East Bank, which is much smaller than state-owned players such as Bank Melli and Bank Saderat, is owned by investors including small and medium-sized Iranian firms.