Bank Melli Iran Managing Director: Bank Melli İran ready to expand economic relations between Azerbaijan and Iran (INTERVIEW)
Azerbaijan, Baku, June 2 / Trend T. Jafarov /
Chairman of the Board and Managing Director of Bank Melli Iran, Mahmoud Reza Khavari, spoke in an interview with Trend in Baku.
Q.: What is the purpose of your visit to Azerbaijan and the essence of the negotiations held during the visit?
A.: The main purpose of the visit is to assess the current potential in Azerbaijan, create conditions for the development of relations between our countries. The activity of Bank Melli İran in Azerbaijan was also discussed. As we know, Bank Melli İran is one of the first in the Muslim world. It has branches not only in Iran but also in different countries. The bank owns 30 percent of all banking assets in Iran.
I think that the potential of the bank should be involved in Azerbaijan. We are very pleased that relations between our countries are developing. Trade turnover between Azerbaijan and Iran is expected to be increased up to $10 billion a year. It is necessary to create banks and enterprises with good opportunities to reach this goal. We want to establish an independent bank in Azerbaijan.
During the visit we met with Iranian businessmen in Azerbaijan, as well as Azerbaijani businessmen operating in Iran. I examined their conditions of work and acquainted with them. Moreover, I met with Azerbaijani officials, including chairman of the Central Bank of Azerbaijan Elman Rustamov, and Iranian Ambassador to Azerbaijan Muhammad Bagir Bahrami made a proposal to create an independent bank in Azerbaijan. Central Bank Chairman welcomed our offer.
The bank plans to open branches in major cities of Baku and Azerbaijan, in border towns. The establishment of the bank will facilitate monetary and banking exchanges between the two countries. Iran and Azerbaijan have common linguistic, religious, historical and cultural roots. That is why there is a need to establish the bank in Azerbaijan.
Now, a branch of Bank Melli İran operates in Baku. We want to establish an independent bank, which will be provided with the necessary capital. It will be registered with the initial capital of $50 million.
Establishment of the new bank will create conditions for increasing investment of Iranian investors to Azerbaijan. The new bank will provide with full range of banking services. It will increase investment, develop export and import between two countries, the banking industry in Azerbaijan and participate in investing in the macro-and micro-finance, commercial and industrial sectors.
We will try, as far as possible, to provide local citizens with the work in the bank. Perhaps, Iranian citizens will work at leading positions. It aims to bring its activity in accordance with Iranian banks, but priority will be given mainly to local staff.
Q.: How do you assess the activity of the banking sector of Azerbaijan?
A.: The number of banks in Azerbaijan is great. But I appreciated the activity of
Azerbaijani banks. Taking into account the fact that the banking activity in Azerbaijan was created after the country gained independence. I appreciate such a development in this period. In particular, I saw a very professional approach of the management and staff of this regulatory body to the work at a meeting at the Central Bank. I hope that they will reach even more significant success.
Q.: How do you assess the activity of the Baku branch of Bank Melli İran?
A.: The activity of this branch of our bank is not very satisfactory. We are not very satisfied with its work. We discussed this issue and hope that in future it will work even better and wider.
Q.: What is the situation now in Iran, with expired loans, particularly in Bank Melli İran? What is the proportion of public and private companies in the total amount of the bank's credit debt? What are the ways to solve this problem?
A.: We ensured transparency in all the archives of Bank Melli İran. As a result, it was revealed that all borrowers of the bank fulfilled the obligations. The main task was to clarify the rate of expired loans. But it turned out that the situation in the last year improved by 45 percent. In general, these guarantees are envisaged in the banking system of Iran on all expired loans. They allow to cover debts in case of need. The world economic crisis also affected the economic activities of Iran. There is no reason for concern in the current situation.
As to expired debts of the government, I must say that during the meeting with Iranian President, held two weeks ago, the President ordered to pay off all debts to Bank Melli İran. The government intends to pay off these debts in the short term. The ways to pay off the debts are known. These debts will be paid off through stock checks of the state, investments in production and industrial manufacturing companies and investments in Tehran Stock Exchange. The debt of the State to Bank Melli İran hits $4,8 billion. The president ordered to pay it off fully.
Q.: How do you assess the impact of the U.S. government's sanctions on Bank Melli İran?
A.: Sanctions have had no impact on our activity. I have always said that "sanction" is a political issue and the decision. It has no reason both from a legal and a banking point of view. No requirements were made in connection with the sanctions. From this perspective, we continue our activity within the international rules and regulations. We do not violate them. Balance sheet of Bank Melli İran confirms capacity of our assets. Last year this figure increased by 15 percent. This shows that Bank Melli İran at full power is continuing its activity in the world and Iran. Sanctions are likely to create some anxiety. But it did not greatly affect our work.