Following the lifting of international sanctions last month, experts at the Central Bank of Iran have started the process of evaluating and rating domestic banks.
“Our experts, in different sectors, are working on rating the banks; however, we need to benefit from the experience of other experts in the field to accelerate the process,” Ali Asghar Mirmohammad Sadeghi, the CBI deputy for credit affairs, was quoted as saying by ILNA.
Sadeghi, however, noted that despite the international sanctions which cut off Iranian banks from international financial networks and undermined their efficiency, the lenders nevertheless meet enough qualifications to be rated.
President Hassan Rouhani has instructed the CBI to issue ratings for all money and credit institutions which would compel Iranian banks to improve and meet the international norms and regulations.
Despite the considerable improvement in international banking over the past two decades, Iran’s banking system has been left behind leading to inefficiency and low productivity.
The sanctions played a key role in depriving the banking industry of interaction with its foreign peers and the international banking system.
Most the banks were cut off from the international interbank messaging network SWIFT from early 2012, which was seemingly the biggest blow to the key banking sector that lasted for four years.
Early Move
However, following the announcement of the landmark nuclear deal between Iran and the six world powers in the summer of last year, an early measure was taken to start reforms in the banking sector and the relink to SWIFT following the implementation of the nuclear accord and lifting of all nuclear-related restrictions on January 16.
Annually, global banks are ranked based on ‘’Tier One Capital Ratio’’ which is the ratio of a bank’s core equity capital to its total risk-weighted assets. The Banker magazine, as one of the world’s leading financial publications, releases every year in July a list of top 1,000 banks in the world.
According to the 2015 ranking issued by the journal, Chinese banks fared better than other global lenders: Industrial and Commercial Bank of China (ICBC) China Construction Bank held the two top spots in the category while JPMorgan stood first.
Bank Saderat of Iran ranked first among Iranian banks in 2015 and was placed among the top 1,000 world banks. Saderat ranked 278th among top banks in the world, said the report. Bank Pasargad and Bank Maskan ranked 401 and 408, respectively.
