Page 45 - IRANRptOct22

National Development Fund of Iran blocks FX accounts of debtor banks
Iran to accept Russia Mir card payments ‘soon’ to accelerate trade, investment ties
Iran’s central bank ‘okays opening of offshore bank to serve Kish Island Free Trade Zone’
The National Development Fund of Iran (NDFI) has announced the blocking of the FX accounts of commercial and state banks that have failed to pay instalments, IBENA reported on July 26.
The national financial body acts as a large escrow fund for international transactions.
“This issue has long become a challenge as regards the National Development Fund and the borrower facilities with overdue loans,” the NDFI said in a statement.
The NDFI did not state the amount owed by the debtor banks, but it is likely to amount to hundreds of millions of USD.
“The National Development Fund must collect its claims when the loans are due. Accordingly, the fund, in coordination with the Central Bank [of Iran] has started blocking the foreign currency accounts of banks that have not paid instalments. They are overdue,” the statement added.
The NDFI and the CBI said they would be holding meetings with the debtor banks to work out new repayment schemes.
Iran will soon start accepting payments made with Russian Mir bank cards, Iranian Deputy Foreign Minister for Economic Diplomacy Mahdi Safari told RIA Novosti in an interview on July 27.
There have been discussions for several years on Iran accepting Mir card payments and Russia accepting payments made with Iranian Shetab cards, as well as on the mutual facilitation of both countries’ financial messaging systems and the forming of a new system in the mould of SWIFT. Talks appeared to accelerate given the onslaught of Western sanctions faced by Moscow in response to Russia’s invasion of Ukraine. As part of its response to the sanctions, the Kremlin has been seeking to quickly build up and expand trade and investment links and opportunities across Asia. Russia is now the world’s most sanctioned nation, replacing Iran in first place. The common predicament faced by Moscow and Tehran makes efforts even more attractive to both parties.
Iran’s banks lack enough desired conformity with global modern chip and PIN standards. No foreign bank cards currently function in Iran.
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 also face a challenge in updating their card-reading machines, many of which are swipe-only.
Russians can use Mir cards in 12 countries to date: Turkey, Vietnam, Armenia, South Korea, Cuba, Uzbekistan, Belarus, Kazakhstan, Kyrgyzstan, Tajikistan, South Ossetia and Abkhazia.
An offshore bank serving Iran’s Kish Island Free Trade Zone is to be opened following an approval granted by the Iranian central bank, according to the secretary of Iran's High Council of Free Trade Zones, as cited by ILNA.
"We have got permission from the central bank for launching Iran's first offshore bank on the island. The Central Bank of Iran has asked us to submit the list of shareholders of the bank," Saeid Mohammad was quoted as saying in an interview with the news agency.
A consortium of shareholders has been formed for the bank, but the names would not be published due to US economic sanctions and other restrictions, he was reported as adding.
45 IRAN Country Report October 2022 www.intellinews.com