Page 34 - IRANRptFeb20

8.1.5 ​Banking connectivity
Russia’s Iran envoy insists countries’ banks will be connected “soon”
Russia’s ambassador to Tehran, Levan Dzhagaryan, has said Russia and Iran’s banking systems will be connected soon, according to IRNA.
For at least three years, Iran has repeatedly stated that its banks will be connected to Russia’s banking system, but the commitment is yet to be realised. As part of the new banking connectivity, the Mir payment system, an internal card processing brand operated in Russia in response to Western sanctions, should be linked to Iran’s Shetab internal payment system. Ambassador Dzhagaryan reportedly once again outlined the plan in a meeting with Iranian officials.
Teething problems in achieving the required connections have been diagnosed according to Iranian Informatics Services Company. It claimed Russia would not move ahead with the plan until Iran upgraded certain banking practices. The key issue appears to be Iran’s payments process. It uses the ‘swiping’ method combined with PIN codes, whereas the Russian process uses the far more international ‘chip and PIN’ approach.
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 Russians believe that as banking cards in Iran are mostly magnetic and less secure than Russian cards, in the event of counterfeit cards, Iran will suffer the damage, and thus have to pay the costs,” Abutaleb Najafi, the director of Iranian Informatics Services Company, was quoted as saying.
8.1.6 ​Bank news
Iran’s Bank Pasargad in with chance of opening Mumbai branch after meeting of foreign ministers
Privately-owned Iranian commercial lender, Bank Pasargad, appears to be in with a good chance of opening a branch in India’s biggest city, Mumbai, following a meeting between Iranian Foreign Minister Mohammad Javad Zarif and his Indian counterpart.
Bank Pasargad originally lobbied the ​Indian government to allow it to form a representative branch in India​ back in 2017 following the cessation of major international sanctions directed at Iran after the introduction of the nuclear deal at the start of 2016.
"Bank Pasargad has permission to open a branch in Mumbai and we are working to address remaining issues,” IRIB quoted Zarif as saying. He added: “Our assets in India could be used as Pasargad’s capital—the subject was discussed with India’s foreign minister during a joint economic commission meeting in Tehran."
Pasargad was originally planning to open at least four branches in India, with a New Delhi branch scheduled to be the first of the four to launch in 2019. But the pressure of the crushing US sanctions introduced by the Trump administration since mid-2018 has slowed down plans.
The question of how much Iranian oil is making its way to India despite the threat of US sanctions is difficult to answer satisfactorily but Pasargad’s CEO, Mostafa Beheshti-Roy, in March last year—speaking in May before the US said it would tighten sanctions to push for zero exports of Iranian oil—referred to oil trades.
“Three [additional] branches in India [in Delhi, Hyderabad and Ahmedabad] could open in the future, which would considerably facilitate the transfer of oil money,” Beheshti-Roy said.
He added that the banking group was also looking at setting up several branches in countries including Spain, Russia, South Africa, Italy and
34​ IRAN Country Report​ February 2020 www.intellinews.com