EghtesadOnline: Iran’s Bank of Industry and Mine has set up correspondent relations with 82 banks from 33 countries in the last Iranian year (ended March 20, 2017), the bank’s deputy for international affairs announced.
“In light of BIM’s professional approach toward international affairs, the bank has a good reputation in global banking market, which has encouraged Asian and European countries to cooperate with our bank in their transactions with Iran,” Abbas Daneshvar was also quoted as saying by BIM’s official website.
“When foreign banks witness our efforts to comply with the latest international banking standards, they become eager to establish correspondent relations with us. Correspondent relations range from a SWIFT transaction to opening accounts and signing finance and refinance deals or anything that both banks agree on,” he added.
According to BIM’s deputy for international affairs, BIM was the first bank to open letters of credit and was the frontrunner in forging correspondent relations with foreign banks after Iran’s nuclear deal with world powers, which lifted economic sanctions from the country, Financial Tribune reported.
Daneshvar announced that in the last Iranian year, BIM opened more than $1.2 billion worth of LCs, as he named China, India, Japan and South Korea from Asia and Germany, Spain, Belgium and Italy from Europe as major partners in foreign exchange transactions.
“78% of the LCs were opened in euro while Indian rupee and Chinese yuan respectively accounted for 10% and 7% of LCs’ value; the rest was opened in Turkish lira and Japanese yen,” he said.
“Bank of Industry and Mine has also been significantly active in attracting lines of credit for major projects in Iran.”
Daneshvar cited BIM’s deal with Exim Bank of China to finance the project of electrifying the railroads between Tehran and Mashhad as a recent example.
BIM and Exim Bank of China signed a deal on July 26, based on which China will extend a $1.5-billion loan to finance 88% of the project to electrify a 926-km railroad between the capital Tehran and the eastern city of Mashhad while Iran will only have to come up with $200 million to fund the remainder of the project, which is to be carried out by China National Machinery Import and Export Corporation.
The bank has also managed to attract a $400-million credit line from India’s Exim Bank and a $100-million credit line from South Korea. India’s Exim Bank also extended a credit line worth $150 million to Iran in February 2016 for supplying 150,000 tons of rail tracks .
The official noted that the sanctions and isolation from the international financial system for years created a gap in banking standards, but BIM has regularly trained its staff to maintain the quality of its services.
“Fortunately, our foresight benefited us as, after Iran’s nuclear deal, we managed to comply with international standards faster than other banks,” he said.
Daneshvar noted that expansion of relations with Germany-based EIH Bank is one of BIM’s top priorities.
“Despite the fact that other foreign banks accept our letters of credit, it is stipulated in BIM’s five-year development plan (2016-21) to improve bilateral relations with EIH,” he said.
EIH has a German license, but is owned by the Iranian state. Iran’s Bank of Industry and Mine is the biggest shareholder with Bank Mellat and Tejarat Bank also owning stakes.
Iranian merchants had founded the bank in the early 1970s to support trade between Europe and Iran. The bank’s activities had been frozen for five years, as the lender was hit with nuclear-related sanctions.