JCPOA proved crucial to improving Iran’s banking ties

Business Materials 18 September 2017 17:40 (UTC +04:00)

Tehran, Iran, September 18

By Mehdi Sepahvand –- Trend:

Iran’s banking ties with foreign banks and companies have improved significantly over the past couple of years, thanks to the implementation of the nuclear deal (aka Joint Comprehensive Plan of Action or JCPOA), a senior banking official believes.

“Under the favorable atmosphere created by the JCPOA, we have been able to extend our foreign ties and have signed a number of deals for providing lines of credit,” Abbas Daneshvar, the director of international affairs and resource mobilization at Iran’s Bank of Industry and Mine told Trend September 18.

Daneshvar counted deals signed with Chinese, Korean, Indian, and Russian partners as landmark deals in this regard.

In late August, a framework agreement was signed between Iranian banks and Korea Eximbank, under which the Korean side would provide a 8 billion euro ($9.4 billion) loan to finance various projects by South Korean companies in Iran.

Also, Russia’s Vnesheconombank, otherwise known as VEB, last week signed a contract worth $1.2 billion with Iran’s Bank of Industry and Mine to finance a thermal power plant project in Hormozgan Province.

Last Thursday, China's CITIC Trust agreed to extend $10 billion credit line for supporting projects in lran, based on an agreement signed between the company and five Iranian banks.

Export Development Bank of Iran, Bank of Industry and Mine, Parsian Bank, Bank Pasargad Iran and Refah Bank were designated to act as the agent banks for using the Chinese financing on water management, energy, environment and transport projects in Iran, the official news portal of the Iranian government reported.

“The establishment of such ties comes with numerous benefits,” Daneshvar said.

“The first benefit is that they improve your credit and encourage more foreign banks to approach you. The second benefit is that with every such contract signed, you contribute to the development of a competitive atmosphere. As a result, when you sit for talks with, say, a 6th or 7th bank, you can use this atmosphere towards more powerful negotiation.”

“Also, these deals bring benefits inside the country. After all, the country needs foreign investment. We provide for the investment via such deals. This in turn also helps economic growth and employment as immediate needs of the country.”