The CBI also issued permits for launching 14,800 bank branches and 1,100 sub-branches.
The CBI also issued permits for launching 14,800 bank branches and 1,100 sub-branches.

Three More Banks to Open Offices in Europe

Banks are currently preparing to launch representative offices in three European countries

Three More Banks to Open Offices in Europe

The Central Bank of Iran has approved three applications by domestic banks for launching offices in Italy, Germany and the UK.

CBI’s Office for Banking and Monetary Permits on Saturday published a report on its performance during Aug. 2015-16, announcing that banks are currently preparing to launch representative offices in three European countries.

The report did not mention the banks’ names.

Since the lifting of the sanctions, Iranian banks have managed to resume operations in European capitals, including Melli Bank in London, Persia International Bank and Bank Sepah branches in Germany and Italy.

Privately owned Bank Pasargad has announced exploring the possibility of establishing a foothold in Germany, Spain, Turkey and China, which could be in the form of wholly-owned branches, joint ventures with local partners or outright acquisitions.

In recent months, some Iranian banks and their overseas branches have restarted operations in the wake of sanctions relief such as Bank Melli's affiliate in Russia known as Mir Business Bank, Melli Bank Plc and its branch in Hong Kong as well as three branches of Bank Mellat in Turkey.

Other banks are in the process of launching new overseas branches. Bank Saman has an eye on neighboring Turkey while Bank Pasargad is holding talks for opening branches in Paris and Rome.

CBI Permits

Domestically, however, the central bank has issued no new permits for the establishment of banks last year. However, 20 credit cooperatives, 49 interest-free micro-lending agencies and eight leasing companies managed to get CBI permits.

Based on a memorandum of understanding signed between the CBI and the Ministry of Cooperatives, Labor and Social Welfare last year, 600 credit cooperatives will be authorized to operate in the money market. The total number of interest-free agencies is estimated to exceed 3,000.

The CBI also issued operation licenses for 221 exchangers last year. During the period, the central bank revoked six licenses of exchangers, as they failed to meet standards set by the regulator, in line with plans for regularization of the informal monetary market.

Caspian Credit Institution (formerly Arman Iranian) was the only credit institution that managed to obtain CBI’s permit during the period.

Out of 7,000 financial institutions operating across the country, more than 6,000 have not received a permit from CBI but hold a massive 20% share of the money market. CBI has kept its heat on such institutions but seems unable to make them toe the line simply due to their close links to powerhouses and vested interests.

The report highlights the fact that the Fifth Five-Year Development Plan (2011-16) requires CBI to approve bank executives' expertise and eligibility before they are appointed. CBI reviewed records of 206 executives last year, 146 of which were confirmed.

Bank Branches

Since last August, CBI issued permits for launching 14,800 bank branches and 1,100 sub-branches.

The office for banking permissions has also launched an online platform for supervising bank branches across the country, in line with plans for enhancing the quality of services in the banking sector.

The country has over 20,000 bank branches that are far too many, given the total population and global standards. After taking office in the summer of 2013, the government has pursued the implementation of a directive issued in the final years of the past administration, calling for a 20% reduction in the number of bank branches.

Bank Melli Iran, Bank Saderat and Bank Keshavarzi have the largest number of branches across the country.

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