Economy, Business And Markets

CBI Processing Applications for Banks in Free Zones

CBI Processing Applications for Banks in Free ZonesCBI Processing Applications for Banks in Free Zones

The Central Bank of Iran is studying 18 applications for establishing private banks in the free trade zones. The applications have been put forward by Iranian investors, the secretary of Iran’s High Council of Free Trade and Special Economic Zones said at the weekend.

“The CBI has approved some of the proposals as they met its capital requirement norms for operating in the FTZs,” ISNA quoted Ali Akbar Torkan as saying at a press conference late Sunday. The official did not provide details or name names.

According to regulations, the minimum capital required for starting a bank in the FTZs in Iran is €25 million ($28.3 million) and lenders are allowed to trade only in foreign currency.

 “The government has no share in these banks and will not interfere in their operations,” he said, adding that there is no restriction for foreign banks to open branches in the designated zones.”

As per law, foreigners are allowed to own up to 40% of bank shares in the mainland while in the free zones they can open banks with 100% equity.

The government is also providing tax exemption and easier visa regulations for work in the special economic and trade zones to facilitate business activities for foreign business and their staff.

Torkan added that proper instruments are needed for financing development projects in the FTZs, including capital markets, offshore banks and branches/offices of foreign banks.

“Currently, we need to construct airports for Aras FTZ in East Azarbaijan Province, and the Chabahar free zone in Sistan-Baluchestan Province,” he said.

Investors from UAE and Turkey have shown interest in launching banks in Aras Free Trade Zone. Russi’s Tempbank earlier announced that it would open a branch in Qeshm Island to help facilitate commercial and economic ties between Iran and Russia. China is also keen on starting a bank and an insurance company in the key Persian Gulf island.