Iran, Kazakhstan Agree to Enhance Banking Coop.

A banking memorandum of understanding was signed between the central banks of Iran and Kazakhstan during President Hassan Rouhani's three-nation tour of Armenia, Kazakhstan and Kyrgyzstan.

Central Bank of Iran Governor Valiollah Seif and National Bank of Kazakhstan Governor Akishev Daniyar Talgatovich signed the agreement in the presence of Rouhani and his counterpart Nursultan Nazarbayev, the website of CBI reported.

Based on the MoU, the central banks of both countries will establish correspondent relations between their commercial banks, use interbank instruments in bilateral business deals, assess the possibility of using national currencies in settling accounts and provide loans to issue guarantees for contractors and exporters of techno-engineering services through their banks.

The MoU also stresses the development of technical cooperation between the central banks of Iran and Kazakhstan, establishing credit lines and opening independent bank units and branches, in addition to establishing a joint bank.

Another MoU concerning cooperation in banking supervision is to be signed by the two countries in the foreseeable future as a number of its contents are being revised and improved.

Armenia, Kazakhstan and Kyrgyzstan form the Eurasian Economic Union along with Russia and Belarus.

Upon his arrival in the Armenian capital Yerevan, President Rouhani stressed that the Islamic Republic seeks closer relations with EEU member states.

"To strengthen economic ties, including techno-engineering cooperation, we need to forge banking links," Rouhani added.

The Kazakh president said on Thursday that since gaining independence, the Central Asian country’s friendly policy toward Iran remains unchanged.

"Now is the time for bringing our cooperation to a strategic level and Kazakhstan is ready to work closely with Iran,” he was quoted as saying by Astana Times.

AIFC Meeting

As part of the trip, the CBI governor also met with Kairat Kelimbetov, a former governor of the National Bank of Kazakhstan and director of Astana International Financial Center.

Seif emphasized that since sanctions were lifted as a result of Iran's nuclear accord with world powers last year, a safe and secure financial environment has been created for potential investors and rekindled business and trade momentum in Iran.

"Under the current circumstances, the Islamic Republic's approach of developing financial, banking and investment cooperation and creating ties with neighboring Muslim countries with a complementary economy has changed," he said.

"Iran is now aiming to foster joint efforts between the private sector and financial entities of both countries based on respect and safeguarding mutual interests."

According to its official website, AIFC is a financial hub for Central Asia, the Caucasus, EEU, the Middle East, West China, Mongolia and Europe. It will be established in Expo 2017, an international exposition scheduled to take place between June 10 and September 10, 2017 in Astana, Kazakhstan.

AIFC operates within a special legal regime based on Common Law, which regulates the legal relationships between AIFC participants and third parties, and is aimed at the development of the financial market.

Kelimbetov said AIFC will officially start its executive functions from January 2018 and work toward privatizing the national companies of Kazakhstan active in energy, communications, railroad and uranium sectors.

The official then asked Iranian companies and financial firms to help with the privatization of Kazakh financial institutions, adding that "in addition to granting regular benefits, [companies who participate with the privatization process] would be eligible for 50-year tax rebate".

The officials also agreed to prepare the ground for holding a series of conferences and seminars in May 2017 in Tehran to bring together the financial and banking officials and business representatives of both countries.