Bank Melli Iran Launches Int’l Money Transfer

Bank Melli Iran announced it can now transfer money overseas for individuals, as the bank expands its international ties in the post-sanctions era.

“The customers are now able to transfer up to €2,000 per month,” said Gholamreza Panahi, director of BMI’s Department for Foreign Exchange.

“Earlier, Iranians had to visit exchangers to send money to foreign countries mostly for educational and medical purposes; now they can get similar services from BMI at a lower fee,” IRNA quoted Panahi as saying on Saturday.

Even though sanctions against the Iranian banking system were lifted last January, Iranian banks have not been able to normalize relations with foreign lenders. There have been some improvements for businesses, as lenders’ performance shows they have issued many letters of credit in recent months.

However, ordinary people still encountered problems in undertaking cross-border money transactions.

Back in June, the Central Bank of Iran allowed banks to trade foreign exchange at the market rate. The bank has also invited the public, mostly businesses, to shift their foreign currency dealings from exchangers to banks, to regulate the market.

Earlier in October, Switzerland’s Reyl Bank announced that it is opening bank accounts for Iranian individuals and companies through its branches in Geneva and Dubai, allowing accountholders to transfer money.

Marked Shift

Mir Business Bank, BMI’s subsidiary in Russia, and BMI’s branch in Hamburg started offering services to businesses back in summer. However, the service was reportedly only offered to major businesses, including petrochemical exporters.

However, BMI's new announcement marks a shift toward offering such services to individual customers. This, according to the bank's forex deputy, has come about due to improvement in the bank's international services.

“We have fully established corresponding relations with about 25 foreign banks,” Panahi said.

“BMI’s branch in Germany and Melli Bank Plc located in London are now connected to Target 2,” he added, noting that other banks can use the services of the two overseas branches.

Target 2 is an interbank payment system for the real-time processing of cross-border transfers throughout the European Union.

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

The UK Treasury also removed the London-based subsidiary of Bank Saderat Iran, Bank Saderat PLC, from the blacklist of financial sanctions against Iran, in late November.

Panahi expects further improvement in Iranian banks’ relations with foreign banks, as “domestic lenders are working to address foreigners’ concerns about working with Iran”.

“Iran’s anti-money laundering initiative was passed a couple of years ago and is being implemented by lenders. We need to familiarize our partners about such issues,” he said.

“Attracting foreign investment for the development of domestic projects is of higher importance for us.”

The official noted that the establishment of corresponding relations for Iranian lenders is now possible.

Panahi admitted that Iranian banks have not managed to meet all the international standards yet, “but this does not mean that we have done nothing”.