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Iran's Middle East Bank says global banking snags starting to ease
March 9, 2016 / 1:20 PM / 2 years ago

Iran's Middle East Bank says global banking snags starting to ease

LONDON, March 9 (Reuters) - Foreign banks are slowly starting to re-engage with Iran’s Middle East Bank after international sanctions were eased in January, although it will be months before all snags are resolved, the bank’s chief said on Wednesday.

“Slowly, slowly the situation is improving,” Parviz Aghili, CEO and managing director of the Tehran-based bank told an Iran conference in London.

“It is going to take four to five months probably, until mid summer, until all the difficulties have been resolved and we are in a position to deal with international banks.”

International sanctions, including banking restrictions, imposed against Iran ended in January under a deal with world powers in which Tehran agreed to curb its nuclear programme.

But U.S. measures including a ban on dollar trading and a freeze on U.S. banks engaging in trade remain in place. This has left non-U.S. banks and insurers wary of processing transactions with Iran, fearing they may still fall foul of the existing measures and a lack of clarity on what they are able to do.

Last month many Iranian banks linked up with global transaction network SWIFT, allowing them to resume cross-border transactions with foreign banks.

Middle East Bank, which is smaller than state-owned players such as Bank Melli and Bank Saderat, is owned by investors including small and medium-sized Iranian firms.

Aghili said it had concluded a transaction via Switzerland involving banks there “without any problem”.

He added that Middle East Bank had set up banking relationships with 18 to 20 foreign institutions in recent weeks, including from Western Europe, in addition to the five to six that it had before sanctions were imposed.

“It was initially mainly smaller banks. Now, we are getting medium sized banks and now a few sizeable banks who have approached us,” Aghili said. “We are moving in the right direction.” (Reporting by Jonathan Saul; Editing by Mark Potter)

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