2 Lenders Report Progress in International Ties

Iranian banks say they have had notable achievements on the international banking scene one year into the implementation of Iran’s nuclear accord with world powers.

Bank Sepah, according to its CEO Mohammad Kazem Choqazardi, has conducted “foreign exchange operations worth $4.4 billion during the year ending January 15 and has managed to resume the operation of its offshore branches in cities such as Frankfurt, Paris, Rome,” reports IBENA.

The Iran deal, officially known as the Joint Comprehensive Plan of Action (JCPOA), was reached on July 14, 2015 between Tehran, P5+1 (five permanent members of the UN Security Council plus Germany) and the European Union. January 16, 2016 marks its implementation day.

The executive says his bank has regained access to SWIFT —a secure network that enables financial institutions worldwide to send and receive information about financial transactions— and through which is working with 88 banks. The CEO of the state-owned lender added that it has opened 42 accounts with 23 international banks.

In outlining the other boons of the nuclear deal, he said Bank Sepah has opened 1,446 letters of credit at a total worth of $1.9 billion, has issued 395 negotiable instruments worth $848 million and has issued 10,091 payment orders valued $1.637 billion. On top of that the bank has also issued 184 foreign exchange guarantees worth $517 million.

Furthermore, announced Choqazardi, the bank has obtained from the Geneva-based Banque de Commerce et de Placements (BCP) the green light to open lines of credit, issue negotiable instruments and payment orders at a combined worth of $256 million using the assets of the Central Bank of Iran.

“Without the implementation of the JCPOA, realizing the mentioned programs would not be possible.”

The CEO said Bank Sepah’s rate of issuing rial guarantees has experienced a 40% rise as it reached 58.7 billion rials ($1.5 million) by December 20 from the previous 42.140 billion rials ($1 million) on March 19, 2016.

He also noted that the bank has so far allocated 3,234 loans worth 23.9 trillion rials ($620.1 million) to small and medium-sized enterprises (SME) as part of the central bank’s targeted 160 trillion rials ($4.1 billion) earmarked for the many troubled enterprises.  

 Bank of Industry and Mine

The chief executive for Bank of Industry and Mine has also spoken of the benefits of the nuclear deal for his bank, saying “at the same time as signing the JCPOA, the first letter of credit of the BIM for Europe was reopened.”

That is while, Ali Ashraf Afkhami notes, “The bank has managed to complete the opening of $2 billion worth of letters of credit for Iranian and foreign companies during the past two years.”

He referred to the ability to conduct cross-border money transactions as an important byproduct of the JCPOA, saying “while we could not even transfer one euro before the deal, the BIM has transferred more than €20 billion during the past year, and that is while we no longer have to pay a 10% fee we previously had to, which in itself has saved at least $2 billion for the country.”