IslamicFinance.de

India has reportedly approved a proposal from Bank Pasargad of Iran to open a branch in Mumbai. The Federation of Indian Export Organizations had earlier objected the entry of Iranian banks into India. In the wake of new US sanctions, India may explore the possibility of reviving the rupee-rial arrangement to import oil from Iran that it has used in the past. The presence of an Iranian bank in India will ensure the smooth flow of funds between the two countries. US President Donald Trump announced on May 8 that Washington was walking away from the nuclear agreement between Iran and the UN Security Council. Trump also said he would reinstate US nuclear sanctions on Iran and impose economic bans on the Islamic Republic.

Governor of the Central Bank of Iran (CBI) Valiollah Seif said the country plans to establish a bank in Azerbaijan with 100% Iranian ownership. The plan involves turning a branch of Bank Melli Iran in Azerbaijan into an independent Azerbaijani bank. Seif added that all the shares of the new bank will be owned by Bank Melli Iran and that the details would be discussed next week during the visit of the Azerbaijani delegation to Tehran. Seif emphasized that certain plans were on agenda for Iran and Azerbaijan to use their national currencies in mutual transactions. Currently 32 banks operate in Azerbaijan and 36 banks operate in Iran.

Mina Mehrnoush, the head of planning at Iran’s Organization for Trade Development, said three Russian banks have voiced their readiness to promote banking relations with the Islamic Republic in the near future in a bid to boost commercial cooperation between Tehran and Moscow. Mehrnoush also said that during a recent visit to Russia by an Iranian trade delegation, “good meetings” were held with three Russian banks, namely Mir Business Bank, Tempbank and RFC Bank. Mir Business Bank, which is the agent bank of Bank Melli Iran, agreed to provide good facilities and open proper credit lines for Iran, she said. The Iranian trade official went on to say that other issues were also discussed in her meetings with Russian banking officials, including opening accounts for Iranian companies without having to make a trip to Russia.

Banks from the UAE, Oman, Qatar and Kuwait have reportedly spent months drawing up plans for entering the Iranian market. There are certain regional institutions taking legal advice to manage very real risks associated with doing business with Iran, according to Stuart Jones Jr., an executive director at EY. Any re-engagement with Iran will take place in several stages and will require updates to policies, procedures, systems and controls as well as ongoing communication with regulators and correspondent banks, Emirates NBD said, adding it did not currently have any material assets or liabilities in Iran. The Persian Gulf banks are weighing re-entry into the Iranian financial system after it was announced that the implementation of a nuclear deal finalized by Tehran and world powers back in July 2015 has officially been started.