Page 36 - IRANRptAug20

Merger expected to produce Iranian “megabank” by end of May
connected “soon.”
It was not until the 1990s that Iran started issuing its own internal cards, which work under the Shetab electronic banking clearance and automated payments system.
The Mir Card, although only introduced in 2015, had some 176 Russian lenders using its system as of January this year, with 97% of ATMs and more than 75% of payment terminals accepting the card.
All Iranian banks and credit institutions have been required by a CBI directive to connect to Shetab. ATMs are prevalent across all of Iran’s cities and towns. The number was in 2016 estimated at more than 39,000.
So far, only a handful of Iranian banks have invested in chip and pin technology. They include Bank Shahr “City Bank” and Bank Mellat. Iranian retailers, meanwhile, still have little knowledge of the system.
The merger of five government and military-owned banks into Iran’s oldest financial institution, Bank Sepah, is expected to take place at the end of the current Persian calendar month (May 20), the ​Financial Tribune ​reported on April 25. ​The “mega-bank” is to include Ansar Bank, Bank Hekmat Iranian, Mehr Eqtesad Bank, Ghavamin Bank and Kosar Credit Institution, owned by different branches of the country’s police and military.
Not to be confused with Iran’s Islamic Revolutionary Guard Corps (IRGC), or “Sepah” in Persian, Bank Sepah is the second oldest financial institution in Iran after the Central Bank of Iran (CBI), dating back to 1925. The two entities are spelt and pronounced differently in Persian but in Latin text appear to be the same. The IRGC’s “Sepah” was created out of the Islamic Revolution in 1979. It means “Corps” in Persian.
Ansar Bank is currently operated by the IRGC, Bank Hekmat Iranian is controlled by the Army of Iran, Mehr Eqtesad Bank is operated by another part of the armed forces structure, Ghavamin Bank is owned by the police and Kosar Credit Institution is operated by the Law Enforcement Force of the Islamic Republic of Iran (NAJA).
The banks will look to reduce their overheads, something which has been on the agenda throughout the banking sector in Iran of late. The assets of the different institutions will be sold off at a later date via the government’s online sales mechanism.
There are roughly 1,800 Bank Sepah branches in the country and around 1,000 branches of the banks to be merged. In the event of banking service duplication, the banks will reportedly reduce their workforce or move staff to locations with less coverage.
The move, which has taken more than a year to prepare, is part of an effort to get a grip on the slow-moving disaster that is the country’s financial sector. It has been insoluble for years due to overleveraging with loans during the good years – some of the problematic loans date back up to a decade.
According to an interview with CBI governor Abdolnaser Hemmati shown on state-run broadcaster IRIB in March last year, the CBI recorded the banks—not including Bank Sepah—as having some 24mn customers holding the equivalent of Iranian rial (IRR) 2.15 quadrillion (€13.8bn at the free market rate) in checking, asset and savings accounts. He said at the time that it would
36​ IRAN Country Report August 2020 www.intellinews.com