Banking and Insurance in Iran

Banking And Insurance In Iran

Since 2001 the Iranian Government has moved toward liberalising the banking sector, although progress has been slow. In 1994 Bank Markazi (the central bank) authorised the creation of private credit institutions, and in 1998 authorised foreign banks (many of whom had already established representative offices in Tehran) to offer full banking services in Iran's free-trade zones. The central bank sought to follow this with the recapitalisation and partial privatisation of the existing commercial banks, seeking to liberalise the sector and encourage the development of a more competitive and efficient industry. State-owned banks are considered by many to be poorly functioning as financial intermediaries. Extensive regulations are in place, including controls on rates of return and subsidized credit for specific regions. The banking sector in Iran is viewed as a potential hedge against the removal of subsidies, as the plan is not expected to have any direct impact on banks.

Demand for investment banking services is currently limited. The economy remains dominated by the state; mergers and acquisitions are infrequent and tend to take place between state players, which do not require advice of an international standard. The capital markets are at an early stage of development. "Privatization" through the bourse has tended to involve the sale of state-owned enterprises to other state actors. There is also a lack of sizeable independent private companies that could benefit from using the bourse to raise capital. As of 2009, there was no sizeable corporate bond market. Electronic banking in Iran is developing rapidly. The needed $70 million dollar initial capital for the opening of each electronic bank as approved by the Money and Credit Council compares with $200 million dollars required to establish a private bank in the country.

Read more about Banking And Insurance In IranHistory, Types of Financial Institutions, Islamic Banking, Rates, Banking Assets and Liabilities, Banking Reserves, Sectoral Allocation of Banking Facilities, OTC Market, Bond Market, List of Iranian Banks, Foreign Banks, Insurance Industry

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Banking And Insurance In Iran - Insurance Industry
... See also Privatization in Iran, Iranian Economic Reform Plan, Takaful, and Insurance The Central Insurance (Bimeh Markazi Iran) company is in charge of regulating this sector in Iran ... Five state-owned insurance firms dominate the sector, four of which are active in commercial insurance ... The leading player is the Iran Insurance Company, followed by the Asia Insurance Company, the Alborz Insurance Company and the Dana Insurance Company ...

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