EghtesadOnline: The Export Development Bank of Iran has rekindled its dealings with 90 international banks after the country reached a nuclear accord with world powers last year, announced the bank’s chief executive.
“After the nuclear deal was struck, we opened accounts with 23 banks and can now do business with 90 banks in 65 countries directly or indirectly,” Ali Salehabadi said in an interview with IBENA.
“The establishment of correspondent relationships will mean that LCs [letters of credit] issued by the Iranian side will be accepted and vice-versa.”
The EDBI chief noted that his bank has now ties with 20 European, 17 Asian and four African countries, of which Turkey, Belgium, Germany, Switzerland, Italy, Spain, Austria, India, South Korea, Japan and China are the most notable.
On goals set out to be achieved by the end of the current fiscal year in March, he said EDBI plans to develop its correspondent ties and establish contact with exim banks of countries such as Turkey, South Korea and Hungary to receive credit lines.
“Since receiving credit lines from other countries is done for the purpose of importing goods, we have only provided credit lines to other countries since the beginning of the year,” he added.
Salehabadi noted that in exports, the bank has so far allocated credit lines to Russia, Armenia and Iraq. He says the credit line to Armenia was worth $83 million and “$200 million were paid to Iranian technical and engineering services contractors in Iraq”.
The head of government-owned bank asked Iranian exporters to introduce credible banks they work with in different countries to EDBI for establishing contact with them and providing exporters with credit lines through those banks.
“This proposition works in the way that exporters receive the final cost of the goods from EDBI that will receive the money from a verified bank in the target country over two years,” he said.
“This kind of deal can be branded as buyer’s credit with the difference that exporters receive their money directly and in cash from EDBI and the interest will be collected from the buyer.”
A buyer’s credit is a loan facility extended to an importer by a bank or financial institution to finance the purchase of capital goods or services and other big-ticket items, Financial Tribune reported.
Salehabadi concluded by saying that financing is a way of developing exports and that is why the National Development Fund of Iran has considered a $1 million deposit in banks solely to strengthen exports.