Bank Melli Iran
Encyclopedia
Bank Melli Iran (BMI), also called the National Bank of Iran, is the first national Iranian bank. The bank was established in 1927 by the order of the Majlis
(the Iranian Parliament) and since then has consistently been one of the most influential Iranian banks.
In 1931 the Iranian Majlis
authorized the bank to print and distribute the Iranian currency rial
. BMI acted as the central bank
of Iran
until Bank Markazi was established in 1960, after which all of its central banking responsibilities were transferred to the new central bank. Over the past 80 years, BMI has grown to become a large retail bank with several domestic and international branches. BMI opened its first foreign branch in Hamburg
, Germany
in 1965.
BMI is now the largest commercial retail bank in Iran and in the Middle East
with over 3300 branches and 43,000 employees. Bank Melli Iran has 18 international branches and services in 11 countries:
All banks in Iran
must follow the banking principles and practices described in the Islamic Banking
law of Iran
passed in 1983 by the Islamic Majlis of Iran
. According to this law, banks can only engage in interest
-free Islamic transactions (interest
is considered as usury
or riba
and is forbidden by Islam
and its holy book the Quran). The permitted commercial transactions involve exchange of goods and services in return for a share of the assumed profit. All such transactions are performed through Islamic contract
s, such as mozarebe, foroush aghsati, joale, salaf, and gharzol-hassane. Details of these contracts and related practices are contained in the Iranian Interest-Free banking law and its guidelines.
June 16, 2008 (1 USD is approximately 9313 Iranian rial
(Rls)):
, a bomb exploded at BMI branch in San Francisco, shattering windows and damaging the wall of the building where the explosive was planted. No injuries were reported and no arrests were made. A caller from the Jewish Defense League
claimed credit for the attack.
, under the Flatow Amendment of the Foreign Sovereign Immunities Act
, in accordance with Section 201a of the Terrorism Risk Insurance Act of 2002, which states that "in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism ... the blocked assets of that terrorist party ... shall be subject to execution". Since most Iranian assets in the United States had been withdrawn after the embassy hostage crisis, the only substantial monetary asset left was approximately $150,000 in the Bank Melli's account in the Bank of New York
. Before turning over the funds to the five students, however, the Bank of New York sued for a legal decision regarding its responsibilities in the case. The United States Department of Justice, speaking as amicus curiae
in support of Bank Melli, advised that the bank had no responsibility for turning the funds over to the students; in March, 2006, Judge Denise Cole ruled against them, and was upheld by the Second Circuit Court in April, 2007. Bank Melli then withdrew the funds from Bank of New York.
imposed unilateral sanctions against Iran
. These sanctions include new measures to reduce Iran’s ability to conduct financial transactions between the state-owned banks of Iran and United States citizens or private organisations. Bank Melli was included in these sanctions, on the grounds that, besides its other customers, Bank Melli provides financial services to Iran’s nuclear and ballistic missile programmes. A fact sheet released by the US Treasury Department also asserts that between 2002 and 2006 Bank Melli sent at least $100 million to Hamas
, Palestinian Islamic Jihad, and other groups, via the Quds Force, a branch of the Iranian Revolutionary Guard.
In a statement published on its web site, BMI refutes the US allegations and categorically denies that it has ever been involved in any "deceptive banking practices".
, and the UK, imposed further unilateral sanctions against Iran
. Sanctions will include the European Union freezing the assets of Bank Melli, in response to Tehran's refusal to suspend its uranium enrichment program.
Majlis
' , is an Arabic term meaning "a place of sitting", used in the context of "council", to describe various types of special gatherings among common interest groups be it administrative, social or religious in countries with linguistic or cultural connections to Islamic countries...
(the Iranian Parliament) and since then has consistently been one of the most influential Iranian banks.
In 1931 the Iranian Majlis
Majlis
' , is an Arabic term meaning "a place of sitting", used in the context of "council", to describe various types of special gatherings among common interest groups be it administrative, social or religious in countries with linguistic or cultural connections to Islamic countries...
authorized the bank to print and distribute the Iranian currency rial
Iranian rial
The rial is the currency of Iran. It is subdivided into 100 dinar but, because of the very low current value of the rial, no fraction of the rial is used in accounting....
. BMI acted as the central bank
Central bank
A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...
of Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
until Bank Markazi was established in 1960, after which all of its central banking responsibilities were transferred to the new central bank. Over the past 80 years, BMI has grown to become a large retail bank with several domestic and international branches. BMI opened its first foreign branch in Hamburg
Hamburg
-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
, Germany
Germany
Germany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
in 1965.
BMI is now the largest commercial retail bank in Iran and in the Middle East
Middle East
The Middle East is a region that encompasses Western Asia and Northern Africa. It is often used as a synonym for Near East, in opposition to Far East...
with over 3300 branches and 43,000 employees. Bank Melli Iran has 18 international branches and services in 11 countries:
- FranceFranceThe French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
(ParisParisParis is the capital and largest city in France, situated on the river Seine, in northern France, at the heart of the Île-de-France region...
) - IraqIraqIraq ; officially the Republic of Iraq is a country in Western Asia spanning most of the northwestern end of the Zagros mountain range, the eastern part of the Syrian Desert and the northern part of the Arabian Desert....
(BaghdadBaghdadBaghdad is the capital of Iraq, as well as the coterminous Baghdad Governorate. The population of Baghdad in 2011 is approximately 7,216,040...
) - AzerbaijanAzerbaijanAzerbaijan , officially the Republic of Azerbaijan is the largest country in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded by the Caspian Sea to the east, Russia to the north, Georgia to the northwest, Armenia to the west, and Iran to...
(BakuBakuBaku , sometimes spelled as Baki or Bakou, is the capital and largest city of Azerbaijan, as well as the largest city on the Caspian Sea and of the Caucasus region. It is located on the southern shore of the Absheron Peninsula, which projects into the Caspian Sea. The city consists of two principal...
) - United Arab EmiratesUnited Arab EmiratesThe United Arab Emirates, abbreviated as the UAE, or shortened to "the Emirates", is a state situated in the southeast of the Arabian Peninsula in Western Asia on the Persian Gulf, bordering Oman, and Saudi Arabia, and sharing sea borders with Iraq, Kuwait, Bahrain, Qatar, and Iran.The UAE is a...
(Abu DhabiAbu DhabiAbu Dhabi , literally Father of Gazelle, is the capital and the second largest city of the United Arab Emirates in terms of population and the largest of the seven member emirates of the United Arab Emirates. Abu Dhabi lies on a T-shaped island jutting into the Persian Gulf from the central western...
- 4 branches and DubaiDubaiDubai is a city and emirate in the United Arab Emirates . The emirate is located south of the Persian Gulf on the Arabian Peninsula and has the largest population with the second-largest land territory by area of all the emirates, after Abu Dhabi...
- 4 branches) - OmanOmanOman , officially called the Sultanate of Oman , is an Arab state in southwest Asia on the southeast coast of the Arabian Peninsula. It is bordered by the United Arab Emirates to the northwest, Saudi Arabia to the west, and Yemen to the southwest. The coast is formed by the Arabian Sea on the...
(MuscatMuscat, OmanMuscat is the capital of Oman. It is also the seat of government and largest city in the Governorate of Muscat. As of 2008, the population of the Muscat metropolitan area was 1,090,797. The metropolitan area spans approximately and includes six provinces called wilayats...
) - BahrainBahrain' , officially the Kingdom of Bahrain , is a small island state near the western shores of the Persian Gulf. It is ruled by the Al Khalifa royal family. The population in 2010 stood at 1,214,705, including 235,108 non-nationals. Formerly an emirate, Bahrain was declared a kingdom in 2002.Bahrain is...
(ManamaManamaManama is the capital and largest city of Bahrain, with an approximate population of 155,000 people.Long an important trading center in the Persian Gulf, Manama is home to a very diverse population...
) - GermanyGermanyGermany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
(HamburgHamburg-History:The first historic name for the city was, according to Claudius Ptolemy's reports, Treva.But the city takes its modern name, Hamburg, from the first permanent building on the site, a castle whose construction was ordered by the Emperor Charlemagne in AD 808...
) - AfghanistanAfghanistanAfghanistan , officially the Islamic Republic of Afghanistan, is a landlocked country located in the centre of Asia, forming South Asia, Central Asia and the Middle East. With a population of about 29 million, it has an area of , making it the 42nd most populous and 41st largest nation in the world...
(KabulKabulKabul , spelt Caubul in some classic literatures, is the capital and largest city of Afghanistan. It is also the capital of the Kabul Province, located in the eastern section of Afghanistan...
) - RussiaRussiaRussia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
(MoscowMoscowMoscow is the capital, the most populous city, and the most populous federal subject of Russia. The city is a major political, economic, cultural, scientific, religious, financial, educational, and transportation centre of Russia and the continent...
) - United KingdomUnited KingdomThe United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
(LondonLondonLondon is the capital city of :England and the :United Kingdom, the largest metropolitan area in the United Kingdom, and the largest urban zone in the European Union by most measures. Located on the River Thames, London has been a major settlement for two millennia, its history going back to its...
) - Peoples Republic of China (Hong KongHong KongHong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
)
Islamic banking
.All banks in Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
must follow the banking principles and practices described in the Islamic Banking
Islamic banking
Islamic banking is banking or banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money...
law of Iran
Iran
Iran , officially the Islamic Republic of Iran , is a country in Southern and Western Asia. The name "Iran" has been in use natively since the Sassanian era and came into use internationally in 1935, before which the country was known to the Western world as Persia...
passed in 1983 by the Islamic Majlis of Iran
Majlis of Iran
The National Consultative Assembly of Iran , also called The Iranian Parliament or People's House, is the national legislative body of Iran...
. According to this law, banks can only engage in interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
-free Islamic transactions (interest
Interest
Interest is a fee paid by a borrower of assets to the owner as a form of compensation for the use of the assets. It is most commonly the price paid for the use of borrowed money, or money earned by deposited funds....
is considered as usury
Usury
Usury Originally, when the charging of interest was still banned by Christian churches, usury simply meant the charging of interest at any rate . In countries where the charging of interest became acceptable, the term came to be used for interest above the rate allowed by law...
or riba
Riba
Riba means one of the senses of "usury" . Riba is forbidden in Islamic economic jurisprudence fiqh and considered as a major sin...
and is forbidden by Islam
Islam
Islam . The most common are and . : Arabic pronunciation varies regionally. The first vowel ranges from ~~. The second vowel ranges from ~~~...
and its holy book the Quran). The permitted commercial transactions involve exchange of goods and services in return for a share of the assumed profit. All such transactions are performed through Islamic contract
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
s, such as mozarebe, foroush aghsati, joale, salaf, and gharzol-hassane. Details of these contracts and related practices are contained in the Iranian Interest-Free banking law and its guidelines.
Financial numbers and statistics
Iranian rial
The rial is the currency of Iran. It is subdivided into 100 dinar but, because of the very low current value of the rial, no fraction of the rial is used in accounting....
(Rls)):
- Total assets = Rls 360,517 billion
- CapitalizationCapitalizationCapitalization is writing a word with its first letter as a majuscule and the remaining letters in minuscules . This of course only applies to those writing systems which have a case distinction...
= Rls 36,487 billion - Net income after tax = Rls 772 billion
- Total loans = Rls 163,595 billion
- Number of branches = 3300
- Number of employees = 43,000
- Bank Melli Iran (BMI) has offered close to 30 percent of all credits to economic, production, industrial and services sectors.
- Online bankingOnline bankingOnline banking allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.-Features:...
services offered by Bank Melli have registered a 370-percent growth in 2008.
Current CEO and directors
- Mahmoud Reza Khavari, President and CEO (Has been fired at 9/26/2011)
- Ali Akbar Asghari
- Jamal Damghanian
- Barat Ghanbari
- Mohamad Taghi Tavakoli
- Mohamad Reza Hossein Zadeh
Terrorist bombing
On January 26, 1981, a bomb exploded outside the San Francisco offices of Bank Melli Iran. According to the National Memorial Institute for the Prevention of TerrorismNational Memorial Institute for the Prevention of Terrorism
The National Memorial Institute for the Prevention of Terrorism is a United States-based non-profit training and professional development center dedicated to improving the skills of police officers.-Role and focus:...
, a bomb exploded at BMI branch in San Francisco, shattering windows and damaging the wall of the building where the explosive was planted. No injuries were reported and no arrests were made. A caller from the Jewish Defense League
Jewish Defense League
The Jewish Defense League is a Jewish organization whose stated goal is to "protect Jews from antisemitism by whatever means necessary"...
claimed credit for the attack.
Civil lawsuit
Following the September 1997 suicide bombing in Jerusalem, five American students who had been wounded were awarded $251 million in compensatory and punitive damages against the government of Iran and the Iranian Revolutionary Guard Corps by Judge Ricardo M. UrbinaRicardo M. Urbina
Ricardo M. Urbina is a United States District Court judge in Washington, DC. He has taken senior status.Urbina earned a B.A. from Georgetown University in 1967. He received his law degree from the Law Center at Georgetown University in 1970. He began his legal career as a public defender. He...
, under the Flatow Amendment of the Foreign Sovereign Immunities Act
Foreign Sovereign Immunities Act
The Foreign Sovereign Immunities Act of 1976 is a United States law, codified at Title 28, §§ 1330, 1332, 1391, 1441, and 1602-1611 of the United States Code, that establishes the limitations as to whether a foreign sovereign nation may be sued in U.S. courts—federal or state...
, in accordance with Section 201a of the Terrorism Risk Insurance Act of 2002, which states that "in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism ... the blocked assets of that terrorist party ... shall be subject to execution". Since most Iranian assets in the United States had been withdrawn after the embassy hostage crisis, the only substantial monetary asset left was approximately $150,000 in the Bank Melli's account in the Bank of New York
Bank of New York
The Bank of New York was a global financial services company established in 1784 by the American Founding Father Alexander Hamilton. It existed until its merger with the Mellon Financial Corporation on July 2, 2007...
. Before turning over the funds to the five students, however, the Bank of New York sued for a legal decision regarding its responsibilities in the case. The United States Department of Justice, speaking as amicus curiae
Amicus curiae
An amicus curiae is someone, not a party to a case, who volunteers to offer information to assist a court in deciding a matter before it...
in support of Bank Melli, advised that the bank had no responsibility for turning the funds over to the students; in March, 2006, Judge Denise Cole ruled against them, and was upheld by the Second Circuit Court in April, 2007. Bank Melli then withdrew the funds from Bank of New York.
United States Sanctions
On 25 October 2007, the United StatesUnited States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
imposed unilateral sanctions against Iran
Sanctions against Iran
This article outlines economic, trade, scientific and military sanctions against Iran, which have been imposed by the U.S. government, or under U.S. pressure by the international community through the United Nations Security Council...
. These sanctions include new measures to reduce Iran’s ability to conduct financial transactions between the state-owned banks of Iran and United States citizens or private organisations. Bank Melli was included in these sanctions, on the grounds that, besides its other customers, Bank Melli provides financial services to Iran’s nuclear and ballistic missile programmes. A fact sheet released by the US Treasury Department also asserts that between 2002 and 2006 Bank Melli sent at least $100 million to Hamas
Hamas
Hamas is the Palestinian Sunni Islamic or Islamist political party that governs the Gaza Strip. Hamas also has a military wing, the Izz ad-Din al-Qassam Brigades...
, Palestinian Islamic Jihad, and other groups, via the Quds Force, a branch of the Iranian Revolutionary Guard.
In a statement published on its web site, BMI refutes the US allegations and categorically denies that it has ever been involved in any "deceptive banking practices".
UK, EU sanctions
On 16 June 2008, the European UnionEuropean Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
, and the UK, imposed further unilateral sanctions against Iran
Sanctions against Iran
This article outlines economic, trade, scientific and military sanctions against Iran, which have been imposed by the U.S. government, or under U.S. pressure by the international community through the United Nations Security Council...
. Sanctions will include the European Union freezing the assets of Bank Melli, in response to Tehran's refusal to suspend its uranium enrichment program.
See also
- Bank Markazi IranBank Markazi IranThe Central Bank of the Islamic Republic of Iran is the central bank of Iran. It is entirely government owned. Among its major purposes are: maintenance of the value of the national currency, balance of payments as well as facilitating trade transactions and contributing to the economic...
- Economy of IranEconomy of IranThe economy of Iran is the eighteenth largest in the world by purchasing power parity and according to Iranian officials' claims is going to become the 12th largest by 2015. The economy of Iran is a mixed and transition economy with a large public sector and some 50% of the economy centrally planned...
- Islamic BankingIslamic bankingIslamic banking is banking or banking activity that is consistent with the principles of Islamic law and its practical application through the development of Islamic economics. Sharia prohibits the fixed or floating payment or acceptance of specific interest or fees for loans of money...
- Banking and Insurance in Iran