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January 2018, No. 86


Banking

BIM to Channel AIIB Infrastructure Finance

Chief executive of Bank of Industry and Mine met with former Japanese premier to outline the activities of the bank since Iran’s nuclear accord with world powers was implemented in January 2015.

In his talk with Yukio Hatoyama, currently an adviser to the Asian Infrastructure Investment Bank (AIIB), Ali Ashraf Afkhami pointed to opening of the first letter of credit through the SWIFT interbank messaging network for the private sector, establishing correspondent banking ties with 82 banks across 33 countries and signing a memorandum of understanding with the Korea Export–Import Bank as important BIM initiatives.

Afkhami said that the bank has played an active role in financing infrastructure development projects such as steel, cement, railways, power plants and petrochemicals. Kavian petrochemicals as well as Lorestan and Mahabad petrochemical companies and financing the construction of Tehran-Qom-Isfahan railway and of modernization of the national fleet were among the projects.

The AIIB adviser was in Iran as part of a five-member delegation to develop bilateral and international economic ties. Hatoyama announced that AIIB is ready to finance infrastructure projects in Iran through BIM.  

Afkhami referred to a $400-million deal with the Export–Import Bank of India, a €1.2-billion ($1.4 billion) finance deal for a thermal power plant project in Hormuzgan Province with Russia’s Vnesheconombank, and a $1.5 billion partnership with the Export–Import Bank of China to electrify Tehran-Mashhad railroad as other BIM undertakings after implementation of the Joint Comprehensive Plan of Action (JCPOA).

“From the viewpoint of investments, Iran is the safest country in the region and the second-biggest economy in the Middle East that boasts a young and educated workforce,” Afkhami said.

He said Iran’s banking system consists of 33 banks, including 9 public banks, 20 private banks and 4 credit institutes, which are compatible with the requirements of the global banking system. In addition, the Iranian stock exchange, which has a major share in petrochemical, refining, banks and investment companies, has experienced a remarkable growth during 2013-2016 and has made significant progress towards joining the global economy.

While explaining the country’s favorable conditions for international engagement, the bank manager stated: Iran’s foreign debt has fallen sharply between 2013 and 2016, and our country has always respected its obligations to repay foreign debt, even in difficult circumstances of the unfair sanctions.

Afkhami reiterated that transparency, business accountability, risk management, attention to validation and, most importantly, respect for financial discipline are most important achievements of the bank, which could raise the position and rank of the bank in the international financial arena.

The former Japanese PM also said: “I believe that the current government, and in particular the Iranian Foreign Ministry, must be nominated for the Nobel Peace Prize for achievement of JCPOA. I would like to strengthen Iran-Japan trade relations and facilitate export of Japanese technology to Iran.

Hatoyama added that the type of software used in the banking system is very important to Japan because the standard of the software defines the quality and efficiency of the banking system.

 

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  January 2018
No. 86