Banking and Insurance in Iran: Wikis


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This is a list of banks in Iran which have oversight by the Central Bank of the Islamic Republic of Iran. Bank Melli, Saderat and Sepah are Iran's three largest banks. They have been hit with UN and US sanctions over the past two years, over alleged links with Iran's nuclear and missile programmes (2008).[1]

Demand for investment banking services is currently limited. The economy remains dominated by the state; mergers and acquisitions 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.[2] "Privatization" 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 to raise capital. There is no sizeable corporate bond market.[2][3] Electronic banking in Iran is developing (2009). 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.[4]


Islamic banking

In 2009 Iranian banks account for about 40 percent of total assets of the world's top 100 Islamic banks. Bank Melli Iran, with assets of $45.5 billion came first, followed by Saudi Arabia's Al Rajhi Bank, Bank Mellat with $39.7 billion and Bank Saderat Iran with $39.3 billion.[5][6] According to CIMB 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.[7]


Commercial banks' (de facto) lending rate

Official rate: 12.0% (2007), 11.5% (2008), 12.0% (2009).[8] Free market rate is 24-25 percent (Aug 2009).[9]

Banks' debt

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, 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, 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).[10]

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).[11] Plan to inject about $13 billion to recapitalize the banking sector (2008)[12] Ninety individuals have managed to secure collective facilities totaling $8 billion from Iranian banks, with previous $27 billion unpaid loans (2009).[9] In October 2009, Iran's General Inspection Office 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.[13]

Bond market

An important development for the Iranian capital markets was the opening of a fixed income market for the first time in 2009 with the issuance of term deposit certicates (traded OTC). The only type of tradable Islamic bond in Iran is the "Participation Paper". These are typically short term bonds (1-3 years) and have the same economic characteristics as fixed-rate conventional corporate bonds.

Derivative market

As of 2009, the Iranian Oil Bourse was a spot market for petrochemical products mainly, with plans to introduce sharia-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, global standards for Islamic derivatives were set in 2010. The “Hedging Master Agreement” provides a structure under which institutions can trade derivatives such as profit-rate and currency swaps.[14]

Commercial government owned banks

No. Bank name[15] Bank name (in Persian) Year founded No. branches (Domestic) No. branches (International)
1 National Bank of Iran بانک ملی ایران 1928 3,300[16]
2 Sepah Bank بانک سپه 1925 290
3 Post Bank of Iran پست بانک ایران 1996 400

Specialised government banks

No. Bank name[17] Bank name (in Persian) Year founded No. branches (Domestic) No. branches (International)
1 Keshavarzi Bank (Agriculture) بانک کشاورزی 1500
2 Maskan Bank (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 بانک توسعه تعاون 2009[18]

Private banks

No. Bank name[19] Bank name (in Persian) Year founded No. branches (Domestic) No. branches (International)
1 Eghtesad Novin Bank بانک اقتصاد نوین 2001 145
2 Karafarin Bank بانک کار آفرین 2001 52
3 Parsian Bank بانک پارسیان 2001 160
4 Pasargad Bank بانک پاسارگارد 2005 218
5 Sina Bank[20] بانك سينا 1985 260
6 Saman Bank Corp بانک سامان
7 Sarmayeh Bank بانک سرمایه
8 Tat Bank[21] بانک تات 2009
9 Day Bank بانک دی 2010 [16]
10 Cyrus Bank بانک کوروش 2010 [16]
11 Ansar Bank بانك انصار 2009 [16]
12 Garzol-Hasaneye Mehr Iran Bank بانك قرض الحسنه مهر ايران 2009 [16]
13 Mellat Bank بانک ملت 1980 57[22][23] 4[24][25]
14 Tejarat Bank 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) Year founded No. branches (Domestic) No. branches (International)
1 Amin[26] تأمین سرمایه امین 2008
2 Novin[26] تأمین سرمایه نوین 2008
3 Pasargard[26] شرکت سرمایه گذاری بانک پاسارگاد 2008

Insurance industry

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. 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.[27][28] 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).

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 contracts and only 5% relate to life products. Payout ratios have shown consistent growth over the years. Last year, the industry average payout ratio was 86%. Iran has 2 re-insurers. The Central Insurance company is in charge of regulating this sector in Iran. Insurance premiums come to just below 1% of GDP. This is partly attributable to low average income per head.[29] In 2001/02 third-party liability insurance accounted for 46% of premiums, followed by health insurance (13%), fire insurance (around 10%) and life insurance (9.9%).[29]

Foreign banks

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.[30]


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

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 (2009).[31] In 2009, four US banks, including Citibank and Goldman Sachs 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 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 and other cities.[32][33]

In 2010, Tehran Times reported [instead?] that the banks filing the requests for working in Iran were from "states in the Persian Gulf and the Middle East regions as well as Asia".[34]

Free trade zones

The minimum capitalization for establishing a foreign bank branch in Iran is euro 5m.[31] 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.[32] 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.[35]


In 2006, Swiss banks UBS and Credit Suisse as well as ABN AMRO and HSBC - 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.[36]


  1. ^
  2. ^ a b "Iran Financial Services Forecast", Economist Intelligence Unit, The Economist, 18 August 
  3. ^ "Federation of Euro-Asian Stock Exchanges". FEAS. Retrieved 2010-02-15. 
  4. ^ "Press TV". Press TV. Retrieved 2010-02-15. 
  5. ^ "Bank Melli Iran, the largest Islamic bank". 2009-08-28. Retrieved 2010-02-15. 
  6. ^ "Bank Melli Iran, the largest in Islamic banking". 2010-01-26. Retrieved 2010-02-15. 
  7. ^
  8. ^|Country Briefings: Iran
  9. ^ a b "In Iran, 90 people owe $8 billion to banks". 2009-08-23. Retrieved 2010-02-15. 
  10. ^ "Iran state banks debts exceed $32 billion". 2009-09-27. Retrieved 2010-02-15. 
  11. ^
  12. ^ "Resources - Economic Indicators". Atieh Bahar. 2008-10-20. Retrieved 2010-02-15. 
  13. ^ "USD 38 billion delinquent loans to Iranian banks". 2009-10-09. Retrieved 2010-02-15. 
  14. ^
  15. ^ "Commercial Government Owned Banks". Central Bank of the Islamic Republic of Iran. Retrieved 2010-01-31. 
  16. ^ a b c d e [1]
  17. ^ "Specialised government banks". Central Bank of the Islamic Republic of Iran. Retrieved 2010-01-31. 
  18. ^ "Iran opens bank to support cooperatives". PRESSTV. Retrieved 2009-08-06. 
  19. ^ "Private Banks". Central Bank of the Islamic Republic of Iran. Retrieved 2010-01-31. 
  20. ^ "بانک سينا". Sina Bank. Retrieved 2010-02-15. 
  21. ^ "Iran establishes three new private banks". 2009-08-26. Retrieved 2010-02-15. 
  22. ^ "Tehran Branches". Bank Mellat. Retrieved 2008-03-12. 
  23. ^ "Provincial Branches". Bank Mellat. Retrieved 2008-03-12. 
  24. ^ "Branches Abroad - Turkey". Bank Mellat. Retrieved 2008-03-12. 
  25. ^ "Branches Abroad - South Korea". Bank Mellat. Retrieved 2008-03-12. 
  26. ^ a b c "Iran to launch investment banks". 2006-11-22. Retrieved 2010-02-15. 
  27. ^ "Iran to privatize 10 power plants". 2009-07-12. Retrieved 2010-02-15. 
  28. ^ [2]
  29. ^ a b "Financial Services Forecast", Economist Intelligence Unit, August 18, 2008 
  30. ^ ttp://
  31. ^ a b "Iran opens doors to foreign banks". Retrieved 2010-02-15. 
  32. ^ a b "Foreign banks want Iran branches". 2007-05-08. Retrieved 2010-02-15. 
  33. ^ [3]
  34. ^
  35. ^ "Foreign banks awaiting Iran's green light". 2010-01-02. Retrieved 2010-02-15. 
  36. ^ "UBS Halts Business With Iran - Business And Money | Business News | Financial News". 2006-01-22.,2933,182444,00.html. Retrieved 2010-02-15. 

See also


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