The head of Iran-Afghanistan Joint Chamber of Commerce says Afghanistan's Ghazanfar Bank will open branch in Iran’s southeastern port of Chabahar soon.
“Ghazanfar Bank has received permits from the Central Bank of Iran to open its branch in Chabahar,” Hussein Salimi said in an interview with Iran Chamber of Commerce newsroom.
According to Salimi, the bank would provide service to both Iranian and Afghan companies which are active in bilateral trade between the two nations.
"The transactions would be transparent and based on international norms, so there would be no risk of being hit by the US sanctions," he said.
Iran’s Energy Minister Reza Ardakanian also on Monday confirmed that an Afghan bank would open its branch in Chabahar Free Trade Zone soon. The minister, however, didn’t name the bank.
“Afghanistan is exempt from sanctions, so Afghan banks are allowed to operate in Chabahar,” Ardakanian said on the sidelines of a meeting with Mohammad Hanif Atmar, Afghanistan's acting foreign minister, who was on a visit in Tehran on Monday.
“Opening of bank branches in Chabahar can pave the way for closer ties between the two neighbors,” he said.
Back in February 2019 it was announced that three Afghan banks have applied for opening branch in Chabahar Free Trade Zone.
Salimi who is also deputy chairman of Iran's Middle East Bank said that opening a bank branch in Chabahar can help resolve financial problems importers and exporters face on both sides.
The US government exempted Chabahar port in 2018 from its new sanctions. The rare exemption is due to the pivotal role the port is about to play in bringing landlocked Afghanistan out of isolation. Afghans hope it could boost their war-torn country’s trade and lay the foundations for tapping into billions of dollars worth of mineral reserves.
Chabahar, major connectivity project
The Chabahar project is a major connectivity program which will help India connect not only with landlocked Afghanistan but also Central Asia.
The project is also part of the International North-South Corridor that will connect Mumbai to Moscow via Iran and Azerbaijan.
The map shows how Chabahar Port in Iran can link India with Afghanistan.
Development of first phase of Shahid Beheshti Port in Chabahar has expanded its capacity to 8.5 million tons which is equal to all ports in northern Iran.
Five phases have been defined for Shahid Beheshti Port which will allow the docking of super-large container ships.
Iran-Afghanistan trade
Afghanistan is among Iran’s top trading partners in the region with exports to the country more than $2 billion. However, lack of normal banking channels has created major hurdles to developing bilateral trade.
Iran exported $2.3 billion worth of goods to Afghanistan between March 2019 and March 2020, topping the list of world exporters to the country. The country is Iran's fifth export destination.
Iran offers 80% discount in export tariffs and 75% discount on import duties to Afghan traders using Chabahar.
Afghan traders can also benefit from warehouse facilities in the strategic Iranian port, which is India's primary gateway to landlocked Afghanistan by circumventing Pakistan.