Iran's MPs allow foreign banks to open branches

TEHERAN - Iran's parliament yesterday approved a proposal to let branches of foreign banks and credit institutions operate anywhere in the country, instead of being restricted as now to free trade zones, state radio reported.


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Published: Thu 29 Apr 2004, 9:54 PM

Last updated: Wed 1 Apr 2015, 11:54 PM

Under the article, approved by parliament as part of discussions of Iran's fourth five-year economic development plan (2005-2010), foreign banks operating in Iran would have to follow Islamic banking principles. These require banks to become a partner when they lend, rather than simply charge interest.

The article, like the rest of the plan, must still be ratified by the Guardian Council, a constitutional watchdog dominated by religious hardliners. Until now, international banks have been allowed to open representative offices only in Teheran, although they could apply to operate branches in the free trade zones set up by Iran to promote foreign investment. Several banks, including StanChart, have expressed interest in setting up branch offices in Teheran.

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