List of banks in Iran - AbsoluteAstronomy.com

In recent years the Iranian Government has moved toward liberalising

Liberalization

In general, liberalization refers to a relaxation of previous government restrictions, usually in areas of social or economic policy. In some contexts this process or concept is often, but not always, referred to as deregulation...

the banking sector, although progress has been slow. In 1994 Bank Markazi (the central bank) authorised the creation of private credit institutions, and in 1998 authorised foreign banks (many of whom had already established representative offices in Tehran

Tehran

Tehran , sometimes spelled Teheran, is the capital of Iran and Tehran Province. With an estimated population of 8,429,807; it is also Iran's largest urban area and city, one of the largest cities in Western Asia, and is the world's 19th largest city.In the 20th century, Tehran was subject to...

) to offer full banking services in Iran's free-trade zones. The central bank sought to follow this with the recapitalisation and partial privatisation of the existing commercial banks, seeking to liberalise the sector and encourage the development of a more competitive and efficient industry. State-owned banks are considered by many to be poorly functioning as financial intermediaries. Extensive regulations are in place, including controls on rates of return and subsidized credit for specific regions. The banking sector in Iran is viewed as a potential hedge against the removal of subsidies, as the plan is not expected to have any direct impact on banks.

Demand for investment banking

Investment banking

An investment bank is a financial institution that assists individuals, corporations and governments in raising capital by underwriting and/or acting as the client's agent in the issuance of securities...

services is currently limited. The economy

Economy of Iran

The 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...

remains dominated by the state; mergers and acquisitions

Mergers and acquisitions

Mergers and acquisitions refers to the aspect of corporate strategy, corporate finance and management dealing with the buying, selling, dividing and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector or location of origin, or a new field or...

are infrequent and tend to take place between state players, which do not require advice of an international standard. The capital markets are at an early stage of development. "Privatization

Privatization in Iran

According to the Fourth Five-Year Economic Development Plan , the Privatization Organization of Iran affiliated to the Ministry of Economic Affairs and Finance is in charge of setting prices and ceding shares to the general public and on the Tehran Stock Exchange...

" through the bourse has tended to involve the sale of state-owned enterprises to other state actors. There is also a lack of sizeable independent private companies that could benefit from using the bourse

Tehran Stock Exchange

The Tehran Stock Exchange is Iran's largest stock exchange, which first opened in 1967. The TSE is based in Tehran. As of July 2010, 337 companies with a market capitalization of US$72 billion were listed on TSE...

to raise capital. As of 2009, there was no sizeable corporate bond market

Bond market

The bond market is a financial market where participants can issue new debt, known as the primary market, or buy and sell debt securities, known as the Secondary market, usually in the form of bonds. The primary goal of the bond market is to provide a mechanism for long term funding of public and...

. Electronic banking in Iran

Shetab Banking System

The Shetab system is the only electronic banking clearance and automated payments system used in Iran. The system was introduced in 2002 with the intention of creating a uniform backbone for the Iranian banking system to handle ATM, POS and other card-based transactions.Prior to its introduction,...

is developing rapidly. The needed $70 million dollar initial capital for the opening of each electronic bank as approved by the Money and Credit Council compares with $200 million dollars required to establish a private bank in the country.

History

In 1960 the Central Bank of Iran (CBI, also known as Bank Markazi) was established as a banker for the government, with responsibility for issuing currency. In 1972 legislation further defined the CBI’s functions as a central bank responsible for national monetary policy. In the 1960s and 1970s, the expansion of economic activity fueled by oil revenues increased Iran’s financial resources, and subsequently the demand for banking services increased exponentially. By 1977, some 36 banks (24 commercial and 12 specialized) with 8,275 branches were in operation.

After the Revolution

Iranian Revolution

The Iranian Revolution refers to events involving the overthrow of Iran's monarchy under Shah Mohammad Reza Pahlavi and its replacement with an Islamic republic under Ayatollah Ruhollah Khomeini, the leader of the...

, the government nationalized domestic private banks and insurance companies. Bank law was changed under new interest-free 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...

regulations. The post-Revolution reduction in economic activity and financial resources required banks to consolidate. By 1982, this consolidation, in conformity with the Banking Nationalization Act, had reduced the number of banks to nine (six commercial and three specialized) and the number of branches to 6,581. Subsequently, the system expanded gradually.

In 2011, seven state-owned and private Iranian banks were involved in a USD 2.8-billion embezzlement case, which involved forging documents to secure multi-billion-dollar loans and purchase state-owned companies

Privatization in Iran

Types of financial institutions

As of 2011, about 80% of the country's wealth was deposited with state banks and the remaining 20% with private banks. Iran's financial institutions are:

Banks
Finance & Credit Institutions
"Gharz al-Hasaneh" Funds (Islamic non-profit granting funds)

Islamic banking

In 2009 Iranian banks account for about 40 percent of total assets of the world's top 100 Islamic banks

Islamic banking

. Bank Melli Iran

Bank Melli Iran

Bank Melli Iran , 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 and since then has consistently been one of the most influential Iranian banks.In 1931 the Iranian Majlis authorized the bank to print and...

, with assets of $45.5 billion came first, followed by Saudi Arabia's Al Rajhi Bank

Al Rajhi Bank

The Al-Rajhi Bank The Al-Rajhi Bank The Al-Rajhi Bank (known as the Al Rajhi Banking and Investment Corporation until a 2006 name change is the world's largest Islamic bank, and a major investor in Saudi Arabia's business world. It is one of the largest joint stock companies in the Kingdom, with...

, Bank Mellat with $39.7 billion and Bank Saderat Iran

Bank Saderat Iran

Bank Saderat Iran is an Iranian Bank. Its name means "the Export Bank of Iran". Bank Saderat Iran was founded by the prominent Mofarrah and Bolurfrushan families, commenced operation on 13 November 1952 with a board of three directors and 20 employees...

with $39.3 billion. According to CIMB

CIMB

CIMB Group CIMB Group is a regional universal bank operating in high growth economies in ASEAN. CIMB Group has the widest retail branch network across the region and is an indigenous ASEAN investment bank....

Group Holdings, Islamic finance is the fastest-growing segment of the global financial system and sales of Islamic bonds may rise by 24 percent to $25 billion in 2010.

Commercial banks

Commercial bank

After the implementation of the Glass–Steagall Act, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S...

s are authorized to accept checking

ChecKing

checKing QA is a web application developed by Optimyth Software intended for monitoring the quality of software development process and its results, for organizations that want to control software quality before it is put into production....

and savings deposits and term investment deposits, and they are allowed to use promotional methods to attract deposits. Term investment deposits may be used by banks in a variety of activities such as joint venture

Joint venture

A joint venture is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They exercise control over the enterprise and consequently share revenues, expenses and assets...

s, direct investments, and limited trade partnerships (except to underwrite imports). However, commercial banks are prohibited from investing in the production of luxury and nonessential consumer goods. Commercial banks also may engage in authorized banking operations with state-owned institutions, government-affiliated organizations, and public corporations. The funds received as commissions, fees, and returns constitute bank income and cannot be divided among depositors.

Derivatives market

As of 2009, the Iranian Oil Bourse

Iranian oil bourse

The Iranian Oil Bourse International Oil Bourse, Iran Petroleum Exchange Kish Exchange or Oil Bourse in Kish is a commodity exchange which opened on February 17, 2008. It was created by cooperation between Iranian ministries, the Iran Mercantile Exchange and other state and private institutions...

was a spot market

Spot market

The spot market or cash market is a public financial market, in which financial instruments or commodities are traded for immediate delivery. It contrasts with a futures market in which delivery is due at a later date...

for petrochemical products

National Iranian Petrochemical Company

The National Iranian Petrochemical Company , a subsidiary to the Iranian Petroleum Ministry, is owned by the government of the Islamic Republic of Iran. It is responsible for the development and operation of the country's petrochemical sector. Founded in 1964, NIPC began its activities by operating...

mainly, with plans to introduce sharia

Islamic banking

-compliant futures contracts for crude oil and petrochemicals in the future. Trading takes place through licensed private brokers registered with the Securities and Exchange Organization of Iran. With help of Bahrain-based International Islamic Financial Market and New York-based International Swaps and Derivatives Association

International Swaps and Derivatives Association

The International Swaps and Derivatives Association is a trade organization of participants in the market for over-the-counter derivatives....

, global standards for Islamic derivative

Derivative (finance)

A derivative instrument is a contract between two parties that specifies conditions—in particular, dates and the resulting values of the underlying variables—under which payments, or payoffs, are to be made between the parties.Under U.S...

s were set in 2010. The “Hedging Master Agreement” provides a structure under which institutions can trade derivatives such as profit-rate and currency swap

Currency swap

A currency swap is a foreign-exchange agreement between two parties to exchange aspects of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency; see foreign exchange derivative. Currency swaps are motivated by comparative advantage...

Rates

As of 2010, the interest rate charged between banks (interbank rate) is set by the government of Iran.

Official "provisional" lending rate (aka "Mobadala")

12.0% (2007), 11.5% (2008), 12.0% (2009). Free market rate is 24-25 percent (Aug 2009).

Deposit rates

As of 2010, private banks have acquired 11 percent of the whole money market

Money market

The money market is a component of the financial markets for assets involved in short-term borrowing and lending with original maturities of one year or shorter time frames. Trading in the money markets involves Treasury bills, commercial paper, bankers' acceptances, certificates of deposit,...

in Iran.

The provisional profit rates for term investment deposits in private banks
and non-bank credit institutions for the year 1387 (2008–2009) & 1390 (2011-2012)
Term of Deposits	Five-year Deposits	Four-year Deposits	Three-year Deposits	Two-year Deposits	One-year Deposits	Special Short-Term Deposits	Short-Term Deposits
Provisional Profit Rate for 1390 (2011) * (percentage)	15	14.5	14	13	12.5	12.5	6-10
Provisional Profit Rate for 1387 (2008) * (percentage)	15-18.5	15-18.5	15-18	15-17.75	17-17.5	15-17.25	10-16.5

* The range given covers the different interest rates offered by different banks. In 2010, for the first time in annual policies, the interest payable on bank deposits is similar for both state-owned and privately-owned banks. For example, overnight deposits’ interest has been reduced from 12.5% last year to 9% this year. Similarly, 5-year term deposits will now earn 17.5% (per annum) interest, as opposed to 19% the previous year.

Banking assets and liabilities

Bank Melli, Saderat

Bank Saderat Iran

and Sepah

Bank Sepah

-History:The first Iranian bank, Bank Sepah was established in 1925 ; its first branch, in Rasht, opened that year. The bank also has branches in Frankfurt, Paris and Rome as well as a wholly owned subsidiary, Bank Sepah International plc which operates in London. "Sepah" is the poetic Persian...

are Iran's three largest banks.

The total debt of 11 state-run banks to the Central Bank of Iran has exceeded $32 billion in 2009, showing a 10-fold increase over the past four years. Bank Melli Iran (aka National Bank of Iran), with nearly $9 billion, had the biggest debt followed by Bank Sepah

Bank Sepah

, Iran's oldest, with about $4.8 billion. Bank Maskan, Bank Keshavarzi, Bank of Industry and Mines and the Export Development Bank of Iran were next with the respective debts of $4.7, $4.1, $3.5 and $1.1 billion. Private sector banks had much lower debts. Bank Parsian

Parsian Bank

Parsian Bank is Iran's largest private bank, headquartered in Tehran, Iran. Founded in February, 2002 as a nongovernmental bank, Parsian Bank now has 174 branches across Iran, 104 of which are in Tehran. The bank entered the Tehran Stock Exchange in 2004...

, the largest private-run bank, owed about $421 million to the Central Bank. In addition, the collective debt of state-sector companies to the Central Bank has reached $25 billion (2009).

Overdue loans

According to unofficial figures, overdue loans have reached IR175,000bn ($17.8bn, €13.6bn, £11bn), an increase of 75 per cent over three years (November 2008). Plan to inject about $13 billion to recapitalize the banking sector (2008). Ninety individuals have managed to secure collective facilities totaling $8 billion from Iranian banks, with previous $27 billion unpaid loans (2009). In October 2009, Iran's General Inspection Office

General Inspection Office (Iran)

The General Inspection Office of Iran is linked to the Judiciary of Iran. It is also called the State Inspectorate Organization of Iran....

informed that Iranian banks have some USD 38 billion of delinquent loans, while they are only capitalized at USD 20 billion. Current average for late debts of Iran's state banks is over 15 percent while the global standard is 3 to 5 percent.

Participation loans

For participation loan

Participation loan

Participation loans are loans made by multiple lenders to a single borrower. Several banks, for example, might chip in to fund one extremely large loan, with one of the banks taking the role of the “lead bank.” This lending institution then recruits other banks to participate and share the risks...

s (known as Musharakat, and similar to project finance

Project finance

Project finance is the long term financing of infrastructure and industrial projects based upon the projected cash flows of the project rather than the balance sheets of the project sponsors...

), the interest rate charged by the banks will be dependent on the profitability of the project for which financing is required. Plan by the Government to limit the maximum rate at 20% (April 2011).

Summary of the assets and liabilities of the banking system

In FY 2004 the balance sheet of the banking system showed that total assets and liabilities were US$165 billion, an increase of 226 percent since 1976. In that year, bank assets were divided as follows: private debt, 34 percent; government debt, 16 percent; and foreign assets (90 percent foreign exchange), 22 percent. Liquidity funds (money and quasi-money) accounted for more than 39 percent of total liabilities.

Assets/Liabilities	2008/09 (billion rials 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.... )⁽¹⁾
Foreign assets	1,216,175.6
Claims on public sector:	235,940.9
Claims on public sector - Government	206,925.9
Claims on public sector - Public corporations and agencies	84,613.5
Claims on non-public sector	1,866,550.9
Others	1,208,222.0
Sub-total	4,582,487.9
Below the line items	810,382.2
Total assets = total liabilities	5,392,870.1
Liquidity:	1,901,366.0
Liquidity - Money	1,901,366.0
Liquidity - Quasi money	525,482.5
Deposits and loans of public sector:	335,620.6
Deposits and loans of public sector - Government	319,542.4
Deposits and loans of public sector - Public corporations and agencies	16,078.2
Capital account	244,659.0
Foreign loans and credits and foreign exchange deposits	610,550.4
Import order registration deposits of non-public sector	2.0
Advance payments on letters of credit by public sector	662.7
Others	1,489,627.2
Sub–total	4,582,487.9
Below the line items	810,382.2

(1) Excludes commercial banks’ branches abroad.

Banking reserves

The ratios of the banks' legal reserves

Reserve requirement

The reserve requirement is a central bank regulation that sets the minimum reserves each commercial bank must hold of customer deposits and notes...

in the Central Bank in 2009 were as follows:

Current deposit: 20 percent
Interest-free-loan deposit: 10 percent
Short-term deposit: 17 percent
One-year deposit: 17 percent
Two- and Three-year deposit: 15 percent
Four-year deposit: 13 percent
Five-year deposit: 11 percent
Other deposits: 20 percent

According to Article 14 of the Monetary and Banking Law of Iran, the CBI is authorized to determine reserve requirement ratio within 10 to 30 percent depending on banks’ liabilities’ composition and field of activity.

Sectoral allocation of banking facilities

In 2008, Iranian banks extended 70 trillion rials

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....

($7 billion) to quick-yield economic enterprises. According to Article 14 of the Monetary and Banking Law of Iran, the CBI can intervene in and supervise monetary and banking affairs through limiting banks, specifying the mechanisms for use of funds and determining the ceiling of loans and credits in each sector.

Sector	Share in total credits (%) - 2009	Share in total credits (%) - 2010
Agriculture Agriculture in Iran Roughly one-third of Iran's total surface area is suited for farmland, but because of poor soil and lack of adequate water distribution in many areas, most of it is not under cultivation.... , water Water supply and sanitation in Iran Water supply and sanitation in Iran has witnessed some important improvements, especially in terms of increased access to urban water supply, while important challenges remain, particularly concerning sanitation and service provision in rural areas.... , and processing industries	25	25
Manufacturing Industry of Iran According to a report by the Economist, Iran has been ranked 39th for producing $23 billion of industrial products in 2008. From 2008 to 2009 Iran has leaped to 28th place from 69th place in annual industrial production growth rate. A recent report by the World Fact Book ranks Iran 3rd among... and mining Mining in Iran Mining in Iran is under-developed. Yet the country is one of the most important mineral producers in the world, ranked among 15 major mineral rich countries, holding some 68 types of minerals, 37 billion tonnes of proven reserves and more than 57 billion tonnes of potential reservoirs....	33	35
Construction and housing Construction in Iran In recent years, the construction industry of Iran has been thriving due to an increase in national and international investment to the extent that it is now the largest in the Middle East region...	20	20
Trade and services	15	20
Export	7	-

OTC market

Since 2009, Iran has been developing an over-the-counter

Over-the-counter (finance)

Within the derivatives markets, many products are traded through exchanges. An exchange has the benefit of facilitating liquidity and also mitigates all credit risk concerning the default of a member of the exchange. Products traded on the exchange must be well standardised to transparent trading....

(OTC) market for bonds

Bond (finance)

In finance, a bond is a debt security, in which the authorized issuer owes the holders a debt and, depending on the terms of the bond, is obliged to pay interest to use and/or to repay the principal at a later date, termed maturity...

and equities called Farabourse. Its shareholders include the Tehran Stock Exchange

Tehran Stock Exchange

Corporation (20%), several banks, insurance companies and other financial institutions (60%), and private and institutional shareholders (20%). As of July 2011, Farabourse has a total market capitalisation of $20 billion and a monthly volume of $2 billion.

In 2010, 5.5% of the Mobile Communications Co. of Iran (MCI)

Telecommunication Company of Iran

Telecommunication Company of Iran was established in 1971 with a new organizational structure as the main responsible administration for the entire telecommunication affairs, and Iran Telecommunication Industries was also founded in the same year to manufacture the required equipment for the...

shares were offered on the Iranian Over-The-Counter (OTC) market, at a value of $396 million. This was the largest IPO-to-date in the Iranian OTC equity market. In 2011, Pardis Petrochemical Co.

National Iranian Petrochemical Company

, the largest producer of urea and ammonia in the Middle East, Amir Kabir Petrochemical Co.

National Iranian Petrochemical Company

, Pasargad Bank

Pasargad Bank

Pasargad Bank, also known as BPI, is a major Iranian banking establishment offering retail, commercial and investment banking services. The company was established in 2005 as a part of the government's privatization of the banking system....

, Yazd Alloy Steel Co. and Ravan Fanavar Co (a car auto part manufacturing company) went all public.

Bond market

The Central Bank must obtain approval from the 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...

in order to issue participation papers.

Participation papers

An important development for the Iranian capital market

Capital market

A capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...

s was the opening of a fixed income market for the first time in 2009 with the issuance of term deposit certicate

Certificate of deposit

A certificate of Deposit is a time deposit, a financial product commonly offered to consumers in the United States by banks, thrift institutions, and credit unions....

s (traded OTC

OTC

OTC may refer to:* Oakwood Technology College* Owatonna Tool Company* Oklahoma Tax Commission* Odenton Town Center* Officer in Tactical Command* Officer Training Corps* Offshore Technology Conference* Ohio Turnpike Commission...

). The only type of tradable Islamic

Islamic banking

bond in Iran is the "Participation Paper". These are typically short term bond

Bond (finance)

s (1–3 years) and have the same economic characteristics as fixed-rate conventional corporate bond

Corporate bond

A corporate bond is a bond issued by a corporation. It is a bond that a corporation issues to raise money in order to expand its business. The term is usually applied to longer-term debt instruments, generally with a maturity date falling at least a year after their issue date...

s. Profit and awards accrued to participation papers are tax exempt.

Around nine billion euros worth of participation bonds in foreign currency

Foreign exchange reserves

Foreign-exchange reserves in a strict sense are 'only' the foreign currency deposits and bonds held by central banks and monetary authorities. However, the term in popular usage commonly includes foreign exchange and gold, Special Drawing Rights and International Monetary Fund reserve positions...

and Iranian 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....

s have been allocated for different projects in the Oil Ministry in 2010. Three billion euros will be allocated to the South Pars gas field and the rest will go to oil field development projects.

Bank Mellat
Bank Mellat
Bank Mellat is a Private Iranian bank. Its name means "Bank of the Nation". Bank Mellat was established in 1980, with a paid of capital of Rials 33.5bn as a merger of ten pre-revolution private banks comprising: Tehran, Dariush, Pars, Etebarat Taavoni & Tozie, Iran & Arab, Bein-al-melalie-Iran,...

's June 2010 offering of bonds worth 250 million euro overseas is considered the third stage of offering a total of one billion euro in bonds designed to help finance development of phases 15-18 of Iran’s South Pars natural gas. The bond has a maturity of three years and an interest rate of eight percent.
New issues in July 2010 included $300 million of papers by the Tehran
Tehran
Tehran , sometimes spelled Teheran, is the capital of Iran and Tehran Province. With an estimated population of 8,429,807; it is also Iran's largest urban area and city, one of the largest cities in Western Asia, and is the world's 19th largest city.In the 20th century, Tehran was subject to...

Municipality and $100 million of participation papers by the Ministry of Energy
Ministry of Energy (Iran)
Ministry of Energy of Iran , is the main organ of the Government in charge of the regulation and implementation of policies applicable to energy, electricity, water and wasterewater services....

. The vast majority of these participation papers pay coupon rates of 2-3% above bank rates.
Also in July 2010, Iran & Shargh Leasing Co. (the first non-bank entity to list a fixed income product on the OTC market) listed $8 million worth of participation papers.
In August 2010, Iran sold about $500 million worth of bonds for the first development phase of the gas deposit. The three-year bonds, yield 16 percent.
In November 2010, Iran will sell 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....

bonds worth $2.3 billion to finance the second development phase of its South Pars gas field. The bonds will be sold through Bank Saderat Iran
Bank Saderat Iran
Bank Saderat Iran is an Iranian Bank. Its name means "the Export Bank of Iran". Bank Saderat Iran was founded by the prominent Mofarrah and Bolurfrushan families, commenced operation on 13 November 1952 with a board of three directors and 20 employees...

, Bank Melli Iran
Bank Melli Iran
Bank Melli Iran , 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 and since then has consistently been one of the most influential Iranian banks.In 1931 the Iranian Majlis authorized the bank to print and...

and Pars Oil and Gas Co. Previously, POGC had sold $1.5 billion worth of papers for the same purpose. These papers pay a coupon of 16% per annum and have a tenure of 4 years.
In November 2010 Keshavarzi Bank
Keshavarzi Bank
Keshavarzi Bank, also known as Agribank, is a major Iranian banking establishment offering retail and commercial services. The company was established in 1933 and as a Farming and Industrial Bank...

listed $100 million of one-year tradable Certificate of Deposit
Certificate of deposit
A certificate of Deposit is a time deposit, a financial product commonly offered to consumers in the United States by banks, thrift institutions, and credit unions....

(CD’s) with an annual interest rate of 15%.

Sukuks

Sukuk

Sukuk is the Arabic name for financial certificates, but commonly refers to the Islamic equivalent of bonds. Since fixed income, interest bearing bonds are not permissible in Islam, Sukuk securities are structured to comply with the Islamic law and its investment principles, which prohibits the...

is an Islamic Fixed income instrument, which looks similar to an asset-backed debt instrument. As of July 2011 and for the first time since the law was passed 3 years ago, Iranian companies such as Mahan Airlines and Saman Bank have respectively issued $30 million and $100 million worth of this type of bonds.

List of Iranian banks

In 2010, The Banker

The Banker

The Banker is an English-language monthly international financial affairs publication owned by The Financial Times Ltd. and edited in London...

listed 13 Iranian banks in the "top 1,000 banks in the world". In 2005 the Iranian banking system consisted of a central bank, 10 government-owned commercial and specialized banks, and four private commercial banks. In 2004 there were 13,952 commercial bank branches, 53 of which were foreign branches. Specialized banks had 2,663 branches.

Commercial government owned banks

No.	Bank name	Bank name (in Persian Persian language Persian is an Iranian language within the Indo-Iranian branch of the Indo-European languages. It is primarily spoken in Iran, Afghanistan, Tajikistan and countries which historically came under Persian influence... )	Year founded	No. branches (Domestic)
1	National Bank of Iran Bank Melli Iran Bank Melli Iran , 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 and since then has consistently been one of the most influential Iranian banks.In 1931 the Iranian Majlis authorized the bank to print and... (aka Bank Melli)	بانک ملی ایران	1928	3,300
2	Sepah Bank Bank Sepah -History:The first Iranian bank, Bank Sepah was established in 1925 ; its first branch, in Rasht, opened that year. The bank also has branches in Frankfurt, Paris and Rome as well as a wholly owned subsidiary, Bank Sepah International plc which operates in London. "Sepah" is the poetic Persian...	بانک سپه	1925	290
3	Post Bank of Iran Post Bank of Iran Post Bank of Iran is an Iranian Bank.-History:Post Bank of Iran was formally established in 2006. It is the eleventh state owned bank in Iran.-International issues:...	پست بانک ایران	1996	400

Specialised government banks

No.	Bank name	Bank name (in Persian Persian language Persian is an Iranian language within the Indo-Iranian branch of the Indo-European languages. It is primarily spoken in Iran, Afghanistan, Tajikistan and countries which historically came under Persian influence... )	Year founded	No. branches (Domestic)
1	Keshavarzi Bank Keshavarzi Bank Keshavarzi Bank, also known as Agribank, is a major Iranian banking establishment offering retail and commercial services. The company was established in 1933 and as a Farming and Industrial Bank... (Agriculture)	بانک کشاورزی		1500
2	Maskan Bank Bank Maskan Bank Maskan , also known as the Housing Bank, is a bank in Iran. In 2008, the Central Bank banned all banks and other financial institutions, except for Maskan Bank, from providing residential mortgages.-Structure:Their subsidiaries include:... (Housing)	بانک مسکن
3	Industry and Mine Bank	بانک صنعت و معدن		31
4	Export Development Bank of Iran	بانک توسعه صادرات ايران	1991	30
5	Toseye-Taavon Bank (Cooperatives)	بانک توسعه تعاون	2009
6	Oil Industry Bank		2010

Private banks

No.	Bank name	Bank name (in Persian Persian language Persian is an Iranian language within the Indo-Iranian branch of the Indo-European languages. It is primarily spoken in Iran, Afghanistan, Tajikistan and countries which historically came under Persian influence... )	Year founded	No. branches (Domestic)	No. branches (International)
1	EN Bank	بانک اقتصاد نوین	2001	145
2	Karafarin Bank	بانک کار آفرین	2001	52
3	Parsian Bank Parsian Bank Parsian Bank is Iran's largest private bank, headquartered in Tehran, Iran. Founded in February, 2002 as a nongovernmental bank, Parsian Bank now has 174 branches across Iran, 104 of which are in Tehran. The bank entered the Tehran Stock Exchange in 2004...	بانک پارسیان	2001	160
4	Pasargad Bank Pasargad Bank Pasargad Bank, also known as BPI, is a major Iranian banking establishment offering retail, commercial and investment banking services. The company was established in 2005 as a part of the government's privatization of the banking system....	بانک پاسارگارد	2005	230
5	Sina Bank Sina Bank Sina Bank is a major Iranian banking establishment offering retail, commercial and investment banking services. The company was established in 1985 as apart of the government's privatization of the banking system.... , formerly "Bonyad Bonyad Bonyads are charitable trusts in Iran that play a significant role in Iran's non-petroleum economy, controlling an estimated 20% of Iran's GDP. Exempt from taxes, they have been called "bloated", and "a major weakness of Iran’s economy", and criticized for reaping "huge subsidies from government",... Credit & Finance Institute"	بانك سينا	1985	260
6	Saman Bank Corp Saman Bank Corp -History:Saman Bank Corp. is a 100 percent privately owned bank and is not listed in tehran stock exchange. This bank started its activities as Credit Institution in September 1999. Subsequently, in August 2002, it received a full banking license and changed its name to Saman Bank...	بانک سامان	2002
7	S-Bank S-Bank (Iran) S-Bank, also known as Sarmayeh Bank, is a major Iranian banking establishment offering retail, commercial and investment banking services... aka "Sarmayeh Bank"	بانک سرمایه
8	Tat Bank Tat Bank For the area in Sandwell, England see Tat Bank, SandwellTat Bank is an Iranian banking establishment offering retail and commercial services...	بانک تات	2009
9	Day Bank	بانک دی	2010
10	Cyrus Bank	بانک کوروش	2010
11	Ansar Bank	بانک انصار	1987	600
12	Garzol-Hasaneye Mehr Iran Bank	بانك قرض الحسنه مهر ايران	2009
13	Mellat Bank Bank Mellat Bank Mellat is a Private Iranian bank. Its name means "Bank of the Nation". Bank Mellat was established in 1980, with a paid of capital of Rials 33.5bn as a merger of ten pre-revolution private banks comprising: Tehran, Dariush, Pars, Etebarat Taavoni & Tozie, Iran & Arab, Bein-al-melalie-Iran,...	بانک ملت	1980	57	4
14	Tejarat Bank Tejarat Bank Tejarat Bank is an Iranian Bank. Its name means Trade Bank.-History:Tejarat Bank was founded in 1979 by the integration of Bank Bazargani, five domestic commercial banks, and six previous multi-nationality banks which were active in international and domestic fields.-See also:*Banking and...	بانک تجارت	1978	1887
15	Refah Kargaran Bank	بانک رفاه کارگران	1960	1128
16	Saderat Bank of Iran	بانک صادرات ايران	1952	3300	30

Investment banks

No.	Bank name	Bank name (in Persian Persian language Persian is an Iranian language within the Indo-Iranian branch of the Indo-European languages. It is primarily spoken in Iran, Afghanistan, Tajikistan and countries which historically came under Persian influence... )	Year founded
1	AminIB AminIB AminIB, also known as Amin Investment Bank, is a major Iranian banking establishment offering commercial and investment banking services. The company was established in 2007 as part of the government's economic reform of the banking system....	تأمین سرمایه امین	2008
2	EN Bank EN Bank EN Bank, also known as Eghtesad Novin Bank, is a major banking establishment offering retail, commercial and investment banking services in Iran...	تأمین سرمایه نوین	2008
3	Pasargad Bank Pasargad Bank Pasargad Bank, also known as BPI, is a major Iranian banking establishment offering retail, commercial and investment banking services. The company was established in 2005 as a part of the government's privatization of the banking system....	شرکت سرمایه گذاری بانک پاسارگاد	2008
4	Turquoise Partners Turquoise Partners Turquoise Partners is an investment boutique which was established in 2005 by a group of Iranian businessmen. Its activities include providing a wide range of financial services to foreign and domestic clients. The company is recognized for its high standards of proficiency and is considered a...	شرکت سرمایه گذاری فیروزه	2005

Insurance industry

The Central Insurance company is in charge of regulating this sector in Iran. Five state-owned insurance firms dominate the sector, four of which are active in commercial insurance. The leading player is the Iran Insurance Company , followed by the Asia Insurance Company, the Alborz Insurance Company and the Dana Insurance Company. Export and Investment Insurance deals with foreign trade. Insurance companies Asia, Dana and Alborz will be listed on the stock exchange in 2009 after review and improvement in their financial accounts, internal regulations and organizational structure nationwide. At the end of 2008, there were 20 insurance firms active in the market, only 4 of which were state-owned (with a 75% market share). Alternate statistics give the market share for private insurance companies since 2006 at 54% since and 46% for governmental insurance companies.

Parsian Insurance became the largest privately owned company to be listed on the Tehran Stock Exchange

Tehran Stock Exchange

in 2010. Parisan is the third largest insurance provider in Iran.

In 2008, the total insurance premiums generated in Iran were $4.3 billion. This is less than 0.1% of the world’s total, while Iran has approximately 1% of the world’s population. The insurance penetration rate is approximately 1.4%, significantly below the global average of 7.5%. This underdevelopment is also evident in product diversity.

Approximately 60% of all insurance premiums are generated from car insurance. Also, 95% of all premiums come from general insurance

General insurance

General insurance or non-life insurance policies, including automobile and homeowners policies, provide payments depending on the loss from a particular financial event. General insurance typically comprises any insurance that is not determined to be life insurance. It is called property and...

contracts and only 5% relate to life products

Life insurance

Life insurance is a contract between an insurance policy holder and an insurer, where the insurer promises to pay a designated beneficiary a sum of money upon the death of the insured person. Depending on the contract, other events such as terminal illness or critical illness may also trigger...

(against world average of 58% for life insurance in 2011). Blood money was $90,000 in 2011.

Payout ratios have shown consistent growth over the years. Last year, the industry average payout ratio was 86%. Iran has 2 re-insurer

Reinsurance

Reinsurance is insurance that is purchased by an insurance company from another insurance company as a means of risk management...

s. Insurance premiums come to just below 1% of GDP. This is partly attributable to low average income per head. In 2001/02 third-party liability insurance

Liability insurance

Liability insurance is a part of the general insurance system of risk financing to protect the purchaser from the risks of liabilities imposed by lawsuits and similar claims. It protects the insured in the event he or she is sued for claims that come within the coverage of the insurance policy...

accounted for 46% of premiums, followed by health insurance (13%), fire insurance (around 10%) and life insurance (9.9%).

The Central Insurance of Iran is currently in the process of implementing some deregulation within the industry and migrating from a tariff-based regulation regime to a prudential based one, which is in line with the internationally accepted standards such as the Solvency

Solvency

Solvency, in finance or business, is the degree to which the current assets of an individual or entity exceed the current liabilities of that individual or entity. Solvency can also be described as the ability of a corporation to meet its long-term fixed expenses and to accomplish long-term...

regime.

Foreign banks

According to CBI, more than 44 offices of foreign banks, which are currently based in Tehran but allowed to operate only inside Free Trade Zones like Kish island, have expressed their interest to establish local branches throughout the country by entering into joint banking ventures with Iranian banks or investment.

Article 44 (fifth clause) of the Iranian Constitution Law had heretofore placed banking activities exclusively in the hands of government. In tandem with the Law on Usury Free Banking Operations, these two measures effectively blocked foreign banking operations from conducting business in mainland Iran. In 2009 the Constitution was to be amended to allow foreign banks to operate normally in mainland Iran.

Foreign branches

The minimum capitalization for establishing a foreign bank branch in Iran is euro 5m. A handful of foreign bank branches and representative offices extant in the country were allowed to undertake administrative and coordination activities but were not permitted to open customer accounts inside the territory of mainland Iran, receive deposits or extend normative facilities.

Until now, foreign banks in Iran have acted as the bridge between foreign companies from the same mother country in the host country. Foreign companies learned of Iran's economic and investment opportunities

Economy of Iran

through these foreign banks in the country.

In 2010, the Iranian government lifted a cap on the percentage of shares in Iranian banks that can be owned by a foreign individual or company. The original law, which applied to both Iranians and foreigners, restricted the amount of shares in a bank that a single company could own to 10 percent and an individual to 5 percent. Iranian ownership of banks is still subject to the limits.

According to the new rules, only the Iranian government has the authority to form joint banks with foreign entities. Foreign entities can now hold over ten percent of the shares in joint banks with Iran but their shares cannot exceed more than 49 percent. Under the same provisions, foreign individuals and entities that have at least 51 percent Iranian ownership shall be considered Iranian companies.

Mainland activities

For the first time since the 1979 Islamic Revolution, Iran is set to allow foreign banks to establish branches in the country and engage in normal banking operations.

In 2008, Bank Markazi (the central bank) formally officiated over the opening of Iran's first foreign bank branch in the capital, Tehran

Tehran

. The Iran-Europe Commercial Bank, which is registered in Hamburg, Germany, but is majority owned by the Bank of Industry and Mines of Iran. The second foreign bank to be created in Iran was the joint Iranian-Venezuelan bank. As of 2010, similar projects exist with countries such as Russia

Russia

Russia 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...

, Belarus

Belarus

Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...

and Egypt

Egypt

Egypt , officially the Arab Republic of Egypt, Arabic: , is a country mainly in North Africa, with the Sinai Peninsula forming a land bridge in Southwest Asia. Egypt is thus a transcontinental country, and a major power in Africa, the Mediterranean Basin, the Middle East and the Muslim world...

.

In 2009, four US banks, including Citibank

Citibank

Citibank, a major international bank, is the consumer banking arm of financial services giant Citigroup. Citibank was founded in 1812 as the City Bank of New York, later First National City Bank of New York...

and Goldman Sachs

Goldman Sachs

The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...

applied for opening a branch in Iran. The banks made a formal request to the Central Bank of Iran (CBI) to establish a branch. If the Majlis

Majlis

and CBI approve their request, these four banks will set up a temporary branch in an Iranian free trade zone. And if they can work according to the Iranian banking law (i.e. usury-free banking), they will also be allowed to open branches in Tehran

Tehran

and other cities.

In 2010, Tehran Times

Tehran Times

Tehran Times began its work in 1979 as a foreign language newspaper to air the voice of the Islamic Revolution. The policy that the newspaper has been following has been based on the guideline set by the revered martyr Ayatollah Mohammad Hossein Beheshti who said: Tehran Times is not state-owned...

reported [instead?] that the banks filing the requests for working in Iran were from "states in the Persian Gulf

Persian Gulf

The Persian Gulf, in Southwest Asia, is an extension of the Indian Ocean located between Iran and the Arabian Peninsula.The Persian Gulf was the focus of the 1980–1988 Iran-Iraq War, in which each side attacked the other's oil tankers...

and 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...

regions as well as Asia

Asia

Asia is the world's largest and most populous continent, located primarily in the eastern and northern hemispheres. It covers 8.7% of the Earth's total surface area and with approximately 3.879 billion people, it hosts 60% of the world's current human population...

Free trade zones

Foreign banks could operate in Iran's free trade zone areas for many years and there are currently three such banks on Iran's Kish Island in the Persian Gulf

Persian Gulf

. Iran’s Majlis (parliament) has ratified the bill for the establishment of domestic-foreign joint banks and insurance companies in free trade zones.

Sanctions

The United States

United States

The United States of America is a federal constitutional republic comprising fifty states and a federal district...

is attempting to isolate Iran from the international financial and commercial system in an effort to promote policy change in Iran regarding its nuclear program and purported terror financing.

In 2006, Swiss banks UBS and Credit Suisse

Credit Suisse

The Credit Suisse Group AG is a Swiss multinational financial services company headquartered in Zurich, with more than 250 branches in Switzerland and operations in more than 50 countries.-History:...

as well as ABN AMRO

ABN AMRO

ABN AMRO Bank N.V. is a Dutch state-owned bank with headquarters in Amsterdam. It was re-established, in its current form, in 2009 following the acquisition and break up of ABN AMRO Group by a banking consortium consisting of Royal Bank of Scotland Group, Santander and Fortis...

and HSBC

HSBC

HSBC Holdings plc is a global banking and financial services company headquartered in Canary Wharf, London, United Kingdom. it is the world's second-largest banking and financial services group and second-largest public company according to a composite measure by Forbes magazine...

- decided to end their operations in Iran. UBS announced that it had stopped doing business with Iran because of the company's economic and risk analysis of the situation in the country. UBS stated that it will no longer deal with individuals, companies or state institutions such as the Central Bank of Iran.

Bank Melli, Saderat

Bank Saderat Iran

and Sepah

Bank Sepah

are Iran's three largest banks. They have been hit with UN and US sanctions

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...

over the past two years, over alleged links with Iran's nuclear and missile programmes (2008). Malaysia and U.A.E are also cooperating with the United States in implementing international sanctions against Iran

Sanctions against Iran

External links

Iran Investment Monthly
SUMMARY OF THE ASSETS AND LIABILITIES OF PUBLIC AND PRIVATE BANKS IN IRAN - Annual report by the Central Bank of Iran (includes official statistics about the OTC bond market in Iran)
Laws and regulations relating to the Iranian Banking sector
Bank Supervision - Central Bank of Iran
List of Banks and Insurance companies in Iran (with a brief description and their contact addresses)
History of banking in Iran
Economist Intelligence Unit: Financial Services Report - Iran (March 2010)
BMI: Iran Commercial Banking Report (56-page report, Q1 2009)
Islamic Republic of Iran: IMF Staff Report – Statistics on the banking sector and macro-economic projections by the International Monetary Fund
International Monetary Fund
The International Monetary Fund is an organization of 187 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world...

(March 2010)

Videos

Iran's Banking System; free PressTV documentary

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Iran's Banking System - 2010 PressTV
Iran's Banking System - 2011 PressTV
Private insurance companies in Iran - 2011 PressTV

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.

History

Types of financial institutions

Islamic banking

Commercial banks

Derivatives market

Rates

Official "provisional" lending rate (aka "Mobadala")

Deposit rates

Banking assets and liabilities

Overdue loans

Participation loans

Summary of the assets and liabilities of the banking system

Banking reserves

Sectoral allocation of banking facilities

OTC market

Bond market

Participation papers

Sukuks

List of Iranian banks

Commercial government owned banks

Specialised government banks

Private banks

Investment banks

Insurance industry

Foreign banks

Foreign branches

Mainland activities

Free trade zones

Sanctions

See also

Further reading

External links