IRAN'S BANKING HISTORY
The first bank founded in Iran in 1850 was "New East Bank", an originally
British owned bank. "Kingdom Bank" founded in 1872 by a British man
named Powell Juluos Reuyter, was among the first banks starting banking
operations in Iran up to 1942. Another bank was "Loan Bank" founded
in 1890 by a Russian Jacque Polia Koof to carry out banking operations
for over 75 years.
"Bank Sepah" was the first Iranian bank established with Iranian
capitals in 1925 under the name of Bank Pahlavi Qoshun, in order to
handle the financial affairs of the military personnel and set up their
retirement fund, with primary capital of 388,395 tomans. In 1960, a
plan of providing a comprehensive monetary and banking constitution
was considered by economic authorities in order to preserve Iranian
currency’s validity and to enforce monetary policies, and it was at
this point Bank Refah has been established,
in accordance with Note 39 of the previous year’s Budget Law.
Nationalization of the Banks
In 1979, after the Islamic Revolution, the government of Islamic
Republic of Iran nationalized all the banks of Iran in order to preserve
the rights of depositors and national funds, to increase industrial
production of the country, and to guarantee refunding of deposits.
Merger of Banks
After nationalization of the banks in 1979,37 banks have been merged
into 6 commercial banks including Bank Refah, bank Melli Iran, Bank
Saderat, Bank Tejarat, Bank Mellat, and Bank Sepah and 3 special banks
including Bank Keshavarzi, bank Maskan, and Mine and Industry Bank (Sanat
va Maadan).
Banks’ Foundations
Following the banks’ nationalization, banks’ foundations have been
changed as follows:
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General Assembly of banks |
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Supreme Council of banks |
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Board of Directors of each bank |
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Managing Director of each bank |
General Assembly of banks includes:
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Minister of Economic and Financial Affairs |
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Minister of Industry |
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Minister of Trade |
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Minister of Jihad and Agriculture |
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Minister of Urban Planning |
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Chief of the Planning and Management Organization
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Supreme Council of banks includes:
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Governor of the Central Bank of Islamic
Republic of Iran |
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Director-general of Bank Melli Iran
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Representative of Economic and Financial
Affairs Ministry |
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Representative of Planning and Management
Organization |
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Representative of Urban Planning Ministry
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Representative of Jihad and Agriculture
Ministry |
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Representative of Trade Ministry Representative
of Industry and Mine Ministry |
Number and tasks of each bank’s board of directors are based on the
bank’s constitution, and managing directors are appointed by Banks’
General Assembly based on the verdict of Banks’ Supreme Council.
Changes of Banking System
Approving non-usury rule in 1983 by Islamic Consultative Assembly
to the aim of applying Islamic banking System after the Islamic Revolution
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