Economy, Business And Markets

Eihbank Opens €480m Credit for Iranian Banks

Eihbank Opens €480m Credit for Iranian BanksEihbank Opens €480m Credit for Iranian Banks

Eihbank has opened €480 million worth of credit for Iranian banks since the lifting of the sanctions on January 16.

Bank of Industry and Mine, Eihbank’s major shareholder, accounts for €108 million of the credit, which is followed by Bank Mellat and Tejarat Bank, other private shareholders of the bank, Mehr News Agency reported on Monday.

The report also confirms that Iranian lenders are connected to the interbank messaging system SWIFT.

The Europaisch-Iranische Handelsbank AG in Hamburg restarted services to Iran on March 1, as the first European lender to do so after the lifting of sanctions. The bank allows customers to transfer money through its branches in Germany and Iran.

Following the removal of sanctions, the CBI issued a set of guidelines, clarifying rules for banks on opening credit lines. Bank Muscat and Eihbank are opening LCs for Iranian entities in euro, Swiss franc, Japanese yen and the Omani rial.

Bank Muscat also announced recently that it will issue letters of credit for Iran up to $200-250 million.

International sanctions, including banking restrictions, imposed against Iran ended in January under a deal with world powers after Tehran implemented temporary curbs on its nuclear program.

However, US measures, including a ban on dollar trading and a freeze on US banks engaging in trade, remain in place. This has left non-US banks and insurers wary of processing transactions with Iran, fearing they may still fall foul of the existing measures and a lack of clarity on what they are able to do.

Iranian merchants founded Eihbank bank in the early 1970s to support trade between Europe and Iran.