Russian banks say they are ready to enter Iran’s banking sector and help facilitate the country’s overseas transactions particularly now that Western financial institutions are dragging their feet to do so even though sanctions against the country have been lifted.
The Moscow-based newspaper Izvestiya wrote in a report that Russian banks are striving to be the first in line after the removal of sanctions against Iran in January.
Experts in the banking sector told the newspaper that while Western banks are waiting for guidance from the authorities on their prospects for cooperation with Iran, Russian banks are keen to get a head start.
"Iran is emerging from years of sanctions, the quality of banking services there has declined and Russian players can enter the market with interesting products for business and the public," Anatoliy Aksanov of Russia's Association of Regional Banks was quoted as saying.
"It is obvious that the amount of trade between Russia and Iran is going to increase. It would be expedient to find a niche while there isn't stiff competition from other international organizations," Aksanov explained in the report that was also covered by Sputnik news agency.
Also, Izvestiya quoted a source in Russia's central bank as saying that it has already started talks with its Iranian counterpart to discuss cooperation in the country’s financial sphere.
"Russia and Iran are preparing to increase trade, so the question has arisen of closer cooperation with the central bank," the source said.
In November last year, Russia's trade representative in Iran Andrey Lugansky told Rossiyskaya Gazeta that Russia and Iran were discussing the creation of a joint clearing bank to enable the two countries to increase their trade. The volume of trade between the two countries was $5 billion in 2015, much of which took place through intermediaries such as Cyprus and the UAE, he said.
Iran has been persistently urging European countries to take the required measures to encourage their banks to facilitate transactions with Tehran now that the sanctions have been removed.
However, the country’s plea appears to have fallen on deaf ears so far.
Analysts have already emphasized that the banks remain wary of the impacts of the remaining American sanctions against Iran, specifically those that address banking transactions with the country.
Reports earlier said they wanted a promise that the US would not prosecute or punish them for transactions involving Iran — a step the US has so far been reluctant to take.
In May, US Secretary of State John Kerry told a meeting of top EU bankers that they would not be penalized for conducting or facilitating business with Iran.
However, European banks have already emphasized that Kerry’s assurances are not enough and a series of confusions that remain over transactions with Iran need to be cleared by Washington.