Two of Iranian banks signed an agreement with Bavarian Industry Association to open representative offices in Munich. This should be considered a major development in the prospect of banking industry in Iran which is now attempting to integrate into international banking community despite the fact that a variety of hurdles are still in place. It used to be the case that Iranian banks had operational offices in foreign countries like Melli Bank in London and Saderat Bank in UAE, however, current proceedings are of different nature and quality. Although earlier establishment of international branches was just to facilitate money transfer, mainly aiming imports and exports, current developments target something more than that.
Sina Bank and Middle East Bank, both are private entities which are listed on Tehran Stock Exchange, each signed an agreement with Bavarian Industry Association to open their offices in Munich, Germany. The implementation phase could take months, but the sure outcome is that with those offices established, financial and banking transactions between Iranian and European entities will come to a new era. This progression negates claims of critiques doubting effectiveness of nuclear deal provisions to promote international financial and banking collaborations. They might have expected a red carpet laid for Iranian banks within a day after sanction removals, and by not observing such a carpet, started doubting effectiveness of JCPOA. That was wrong, at least in practice.
There is a basis here: business collaboration requires mutual confidence and trust, not an enactment or a contract could turn into trust, but vice-versa is what should be on agenda. With mutual trust, parties can move forward with agreements and contracts and that is what underlies current advancements. I strongly believe this trend is ongoing and not stoppable, because we live in a more than ever complex world of interconnections and it is not possible to survive raising barriers. Once those offices are operational, banking transactions, at least with Euro, will surely be facilitated by much, and as a next step, I predict, financial and investment provisions would be the case.
That is the major distinction between current openings and those of previous era, as the latter were on the roadblock utilizing maximum planned potentials with no prospect of going further and the former is still on the beginning, promising lots of potentials not only money transactions for imports and exports, but also to expedite financial and investment integrations, as one of the main obstacles for investors at both sides is going to be removed.