Financial reforms play key role in Iran’s re-integration into world
Baku, Azerbaijan, Dec. 21
By Khalid Kazimov – Trend:
It appears that a possible failure in the performance of the Iranian banking system could leave serious impacts on the country’s industrial sector.
While Iranian banking system is still struggling to reintegrate into the global financial system, lack of transparency in the country appears to be the main obstacle.
In the meantime, the Iranian banking system appears almost alone in financing industrial and economic projects due to shortcomings within the country’s capital market.
The Central Bank of Iran Governor Valiollah Seif earlier said that the banking system covers about 90 percent of the issue of financing of projects in the country.
This is while the government debt to the banking system over the current fiscal year (starting March 20) reached $68.6 billion by Oct. 22.
Despite the removal of nuclear related sanctions on Iran following the implementation of the nuclear deal in January 2016, most of leading European banks still remain reluctant to do business with the Islamic Republic.
Lack of a proper transparency could be among main reasons behind their reluctant behavior.
The leading commercial banks require Iran to adopt international standards including anti-money laundering rules.
The international banks fear that cooperation with Iran could pave the way for dirty money to enter into the international banking system.
In this situation, according to the International Monetary Fund, faster implementation of structural reforms, completion of Anti-Money Laundering/Combatting the Financing of Terrorism (AML/CFT) reforms and removal of obstacles to private sector development would allow growth to become more diversified, resilient and job intensive.
The refusal of international banks to cooperate with Iranian counterparts would inflict severe damages on the Islamic Republic.