Foreign banks can set up branches in Iran with €5m in capital

Tasnim – The Central Bank of Iran (CBI) announced that foreign banks can apply for a license to establish their branches in Iran with at least 5 million euros in capital.

In a recently-published circular, the CBI has clarified the instructions for establishing, operating and closing the branches and offices of foreign banks in Iran.

The foreign banks can set up two types of branches. The capital needed for the establishment of the first-type branch is at least 10 million euros and 5 million for the second-type branch, according to the announcement.

The circular stipulates that the second-type branch is not allowed to receive deposits under any circumstances.

However, the first-type branch is not allowed to accept deposits until one year after its authorized inauguration.

After the mentioned period and with the approval of the CBI, the branch would be allowed to accept interest-free deposits from legal persons for a period of two years.

At the end of the two-year period, it can accept deposits from all real and legal persons, according to the circular.

The announcement came as Iran has announced its plans for the formation of “the anti-sanctions management room” in the Economy Ministry aimed at monitoring the Americans’ measures in the banking sector and (Iran’s) moves to strengthen (its) banking system.

Tensions between Iran and the US have escalated since US President Donald Trump walked away from the 2015 nuclear deal between Iran and world powers in May and re-imposed sanctions on the Islamic Republic.

US officials have also repeatedly said they will cut Iran’s oil exports to zero.

Following the US exit from the nuclear deal, Iran and the remaining parties launched talks to save the accord.

Trump on August 6 signed an executive order re-imposing many sanctions on Iran, three months after pulling out of the Iran nuclear deal.

He said the US policy is to levy “maximum economic pressure” on the country.

The second batch of US sanctions against the Islamic Republic took effect on November 4.