Economy, Business And Markets

Iran Market Attractive, But Banking Hurdles Persist

Iran Market Attractive, But Banking Hurdles Persist Iran Market Attractive, But Banking Hurdles Persist

Iranian banks struggling to reestablish normal links with their European partners has been one of the main complaints raised by Tehran. The landmark nuclear deal it signed with the six   world powers last summer has fallen short of its promises.  

Alike many other analysts, Ferial Mostofi, a prominent businesswoman, believes that to overcome these and other   barriers, local banks, institutions and firms need to upgrade their standards and rebuild closer ties with the global players such as the International Momentary Fund.

Mostofi, a senior member of Iran Chamber of Commerce, Industries, Mines and Agriculture, said because of the global economic recession, most western and international firms want to work in and with Iran

“With abundant natural resources of oil, gas and minerals, 80 million people and access to the 400 million-strong neighboring markets, Iran has the potential to be a powerful supply hub in the region,” she told ISNA.  

According to Mostofi, another sticking point is the “climate of uncertainty” that the US government has knowingly created related to Iran’s interaction with non-American banks, in particular the major international financial institutions.

 Kerry Unconvincing

“US secretary of state (John Kerry) has said that international banks can resume cooperation with Iran, but there are no guarantees, because he is secretary of state, not the secretary of treasury,” she said referring to Kerry’s recent meeting with top European bankers in London. “Therefore Iran and other countries need to pressure the US Department of Treasury so that banks willing to work with Iran would not have to first coordinate activities with the US administration.”

Recalling that many foreign firms have returned to Iran to start business and trade, the head of ICCIMA’s Investment Committee said many of the companies “still have serious misgivings and several reasons are responsible for this uncertainty.

Uncertainty about the safety of their investment and concerns about corruption are among the main obstacles to normal dealings with Iran, she said. “We must admit that our banks and financial institutions still have not reached the desired levels needed to negotiate with their international peers. We do need to catch up with global norms. The other thing is that our banks do not have the tools necessary to effectively fight money-laundering.”

As to what the government and relevant bodies can and must do to get past the barriers, Mostofi said “we need to connect with institutions such as the IMF and the WTO in order to augment our capabilities in combating money-laundering and improve standards. European banks have suffered hefty (US) fines for working with Iran and they fear it might happen again.”

Furthermore, we need to “ease the business environment and speed up privatization.”