Iran’s banking sector has rebounded in the absence of sanctions lifted under the 2015 nuclear deal and will continue to rebuild its foreign correspondent relations despite the recent US withdrawal from the deal, a senior banking official said.

“At the time of signing JCPOA, our banking system was facing two main shortcomings: being out of step with the global banking standards and disconnect with the international banking network,” said Bank Sepah’s CEO Kazem Choghazardi.

He was using an acronym that stands for the official name of the accord, the Joint Comprehensive Plan of Action.

“Thanks to the efforts of the Central Bank of Iran, our banking sector has managed to approach these standards. Admittedly, we are still falling short, but we will soon catch up,” Choghazardi told IBENA on Saturday.

His comments came days after US President Donald Trump announced a controversial decision to unilaterally breach the multilateral pact, which capped Iran’s nuclear development in return for giving it sanctions relief.

Shaking off years of nuclear sanctions, Iran’s banking industry has been striving since the deal took effect in early 2016 to rejoin the global banking network.

However, residual US sanctions not covered by JCPOA banned the use of US dollar and its financial system to clear Iran-linked transactions, scaring off major foreign banks and companies from the Iranian market.

With Trump’s Wednesday statement and his vow to reimpose nuclear sanctions, they might feel even more reluctant to approach the Islamic Republic’s large, untapped economy.

“In view of the anti-Iran sanctions, some large lenders have remained wary of reestablishing ties with Iran’s banking system, but some smaller and local banks have forged good relations with Iran and figures show a good level of engagement, especially in terms of correspondent relations and foreign exchange trade,” Choghazardi said.

“Despite the US announcement to officially pull out of the deal, other parties have reaffirmed their commitment to preserve and continue the implementation of JCPOA,” he added.

Separately, lawmaker Nasser Mousavi said the banking sector has grown immune to Trump’s moves after years of exposure to US sanctions.

“The US walkout would cause no disruption in our banking network … It has withstood years of sanctions and no extraordinary outcome is expected from the US pullout.”

Source:

2018, Iran, Banking Sector to Take No Hit From US JCPOA Exit, Sunday, May 13, p.1,<https://financialtribune.com>