Page 46 - IRANRptOct22

8.2 Central Bank policy
Iran, Russia agree to tighten banking, monetary cooperation
Iranian banks close extraterritorial access
The Central Bank of Iran (CBI) and Central Bank of Russia (CBR) have signed a memorandum on interbank cooperation that outlines an expansion of banking and monetary collaboration, CBI governor Ali Salehabadi said on July 9.
Salehabadi met with Deputy Prime Minister of Russia Alexander Novak and CBR chief Elvira Nabiullina. They discussed moves necessary to remove obstacles to the use of bank payment cards issued in Russia within Iran and the use of Iranian payment cards in Russia as well as other issues including smoothing paths to joint investments to be made by Tehran with Moscow. Novak said that the development of economic and investment ties between Russia—the world’s most sanctioned country—and Iran—the second most sanctioned country—was a priority.
In May, Novak and Iranian Petroleum Minister Javad Owji signed three major memoranda of understanding (MoU) on expanding energy and banking ties. The two officials serve as co-chairs of the Iran-Russia economic and trade cooperation commission.
The official IRNA news agency quoted Owji in May as saying that Iran and Russia had agreed to use national currencies in the settlement of trade and energy payments.
Novak added in comments quoted by Russia’s official Tass news agency that Moscow and Tehran had agreed to “move to the highest possible level of mutual settlements in national currencies”.
Some banking systems inside Iran have disconnected users accessing apps and online banking from abroad, Digiato reported on July 4.
The push to digital banking has been ongoing in the Islamic Republic over the past decade, with certain private banks leading the app and mobile banking charge. The Iranian government has also pushed banks to move away from brick and mortar setups to reduce overheads and offload their property portfolios.
Banks, including Pasargad, have without notice disconnected those with a non-Iran IP addresses from accessing banking services.
The central bank has not yet given an official response to this issue, but the step is believed to have been taken for security and to prevent cyber attacks from hostile countries.
The Pasargad Bank decision has caused additional problems for Iranians during US-led sanctions and involved Iranians abroad as well.
Iranian banks are disconnected from global banking messaging systems, including Swift based in Belgium. To transfer money out of the country, nationals would need to transfer funds locally using the Hawala system, and be given another amount abroad from a third party.
The Hawala form of money transfer is largely barred by international banks as it is flagged for anti-money laundering (AML) reasons.
46 IRAN Country Report October 2022 www.intellinews.com