Iran’s proposal to allow foreign banks welcomed

On Saturday, the Monetary and Credit Council agreed to present a bill to parliament which would allow foreign banks to establish branches in Iran, buy shares in Iranian banks, and establish banks through joint investment with Iranians.

About 21 foreign banks’ representative offices have been registered in Iran and are offering banking services, but these offices act only as agents between Iranian banks and the major bank in their respective countries.

These representative offices are impatiently waiting for a breakthrough so that they can act as a branch of the major bank.

Britain’s Chartered Standard, Japan’s Sumitomo Mitsui Banking, Italy’s Banca Nazionale del Lavoro, Spain’s Banko Central Hispano, Germany’s Commerzbank and Deutsche Bank AG, and Switzerland’s Credit Suisse Bank are some of the foreign banks which have representative offices in Iran.

The Mehr News Agency spoke to several MPs and a banking expert on Monday about the Monetary and Credit Council’s proposal.

MP Morteza Tamaddon of the Majlis Budget Committee said, “We welcome everything that connects the country to the international monetary network.

“The economy of the country will benefit from any measure that facilitates Iran’s participation in international banking.”

The regulation of foreign banks’ relations with Iran will lead to the growth of the country’s banking system, Tamaddon observed.

He went on to say that the participation of Iran’s banking system in a competitive arena will help eradicate its current shortcomings.

The former managing director of the Sepah Bank, Mahmud-Reza Khavari, said that the participation of foreign banks in Iran’s banking system would facilitate the transfer of technology and experience as well as information exchange with foreign banks and would also attract foreign investment.

MP Iraj Nadimi of the Majlis Economic Committee said that when a foreign party can not own or manage monetary organizations, foreign investors will have no incentive to participate in the country’s economic activities.

“In fact, foreign investors never work with an Iranian manager. Basically, they think that if Iranian managers had high qualifications, there would be no need for a foreign bank or a foreign director,” Nadimi added.

MP Mohammad-Mehdi Mofatteh of the Majlis Budget Committee said that the active presence of foreign banks in Iran would enhance the performance of Iranian banks.

The entrance of foreign banks into the scene will create a spirit of competition in Iran’s banking system, and this competition will eventually lead to a decrease in interest rates and an increase in loans, he noted.

MS/HG

END

MNA