One Of Iran’s Biggest Banks Fails Amid Push To Tighten Standards
Central Bank of Iran Governor Mohammad-Reza Farzin announced the official closing of Ayandeh Bank in a statement.
Ayandeh Bank, one of Iran’s largest commercial lenders, has been dissolved in a state take-over that’s exposed major failings in a globally isolated sector dogged by bad debts and weak regulation.
Central Bank of Iran Governor Mohammad-Reza Farzin announced the official closing of Ayandeh Bank in a statement, adding that the lender’s customers, employees and branches will be absorbed by the state-owned Bank Melli as of Saturday. He didn’t give any figures for the size and scope of Ayandeh’s debts and financial losses, only referring to its “inefficiency,” “unhealthy performance” and negative capital adequacy ratio.
“Despite all the efforts made, this bank could not be placed on the path of reforms as desired by the central bank,” Farzin said, referring to Ayandeh as a “symbol of the inefficiency and imbalances” that have come to define Iran’s banking system over the past 20 years.
Ayandeh Bank’s website, www.ba24.ir, appeared to be inaccessible from outside Iran and its latest accounts, which are normally published on the website of the Tehran Stock Exchange where the bank’s shares are traded, were also not accessible because the bourse’s website has been restricted for several years.
Thursday’s intervention comes days after the head of Iran’s judiciary, Gholam-Hossein Mohseni Ejei, heavily criticized both Ayandeh and officials at the CBI for failing to reform the bank and worsening its position by allowing losses to balloon several times over since coming under special measures by the central bank in 2019.
Iran’s banks have for years been isolated from the global financial system because of US sanctions and their lack of compliance with international lending standards set by the Paris-based Financial Action Task Force, which placed the country on its so-called black list in 2020.
Ayandeh Bank, one of Iran’s largest commercial lenders, has been dissolved in a state take-over that’s exposed major failings in a globally isolated sector dogged by bad debts and weak regulation.
Central Bank of Iran Governor Mohammad-Reza Farzin announced the official closing of Ayandeh Bank in a statement, adding that the lender’s customers, employees and branches will be absorbed by the state-owned Bank Melli as of Saturday. He didn’t give any figures for the size and scope of Ayandeh’s debts and financial losses, only referring to its “inefficiency,” “unhealthy performance” and negative capital adequacy ratio.
“Despite all the efforts made, this bank could not be placed on the path of reforms as desired by the central bank,” Farzin said, referring to Ayandeh as a “symbol of the inefficiency and imbalances” that have come to define Iran’s banking system over the past 20 years.
Ayandeh Bank’s website, www.ba24.ir, appeared to be inaccessible from outside Iran and its latest accounts, which are normally published on the website of the Tehran Stock Exchange where the bank’s shares are traded, were also not accessible because the bourse’s website has been restricted for several years.
Thursday’s intervention comes days after the head of Iran’s judiciary, Gholam-Hossein Mohseni Ejei, heavily criticized both Ayandeh and officials at the CBI for failing to reform the bank and worsening its position by allowing losses to balloon several times over since coming under special measures by the central bank in 2019.
Iran’s banks have for years been isolated from the global financial system because of US sanctions and their lack of compliance with international lending standards set by the Paris-based Financial Action Task Force, which placed the country on its so-called black list in 2020.
