Bank Melli Iran
Template:Short description Template:Use dmy dates Template:Infobox company Bank Melli Iran (BMI; Template:Langx) is a leading commercial bank in Iran, headquartered in Tehran. It was established in 1928 under the newly established rule of Reza Shah, and served as the country's central bank until 1960, when the Central Bank of Iran was established for that purpose and Bank Melli Iran was repurposed as a merely commercial bank.
As of 2016, Bank Melli Iran was the largest Iranian company in terms of annual income with a revenue of 364 657 billion rials in 2016.<ref name=":0">Template:Cite web</ref> It was the largest bank in the Islamic world and in the Middle East.<ref name=":0" /> By the end of 2016, BMI had net assets of $76.6 billion and a network of 3.328 banking branches; so it was known as the largest Iranian bank based on the amount of assets. The brand of BMI was recognized as one of the 100 top Iranian brands in 10th National Iranian Heroes Championship in 2013.<ref>Template:Cite web</ref> The National Bank has 3328 active branches inside, 14 active branches and 4 sub-stations abroad, and it has 180 booths.<ref>Template:Cite web</ref>
History
Background
The formation of a modern national bank that would keep foreign influence in check became a topic of debate in Qajar Iran during the last quarter of the 19th century, following similar debates in the Ottoman Empire following the establishment of the foreign-controlled Ottoman Imperial Bank in 1863. In 1879, a proposal along such lines was made to emperor Naser al-Din Shah by Tehran business leader Haj Muhammad Hassan Amin al-Zarb.<ref>Template:Cite web</ref> During the Persian Constitutional Revolution, the aspiration to financial independence became a major political issue,<ref>Template:Cite webTemplate:Dead link</ref> leading to the publication of a manifesto promoted by a group of prominent merchants in December 1906.<ref>Template:Cite web</ref>
On 23 November 1906, Abolqasem Naser ol-Molk, the Minister of Finance of the time of Mozaffar ad-Din Shah Qajar, reported to the National Consultative Assembly about the country's financial crisis and suggested a loan from European countries to deal with it, but the deputies rejected that option and, on 9 December, agreed to establish a national bank instead. But the abrupt changes in the political environment and the Anglo-Russian Convention of August 1907 prevented that vision from becoming reality until after the 1921 Persian coup d'état and the establishment of the Pahlavi dynasty in 1925.<ref>Template:Cite web</ref> Soon after cementing his rule, Reza Shah started considering a revival of the national bank project, intended as a departure from Persia's previous dependency on foreign finance embodied by the Imperial Bank of Persia.Template:R
National bank of issue
The bank was initially established as Banque Nationale de Perse (Template:Lit) in 1928, based on a law approved by the National Consultative Assembly on Template:Date. The bank's statute was approved by the National Consultative Assembly's Finance Committee on Template:Date. The bank started operations on Template:Date,<ref name=BMIH>Template:Cite web</ref> originally located in the former building of the Persian Tobacco Régie.<ref>Template:Cite web</ref><ref name=Spaces>Template:Citation</ref>Template:Rp Its initial capital was 20 million Rials, of which 8 million were paid. It soon opened two branches in addition to its head office, in Tehran's Grand Bazaar and in Bushehr, the country's most important commercial port.
Due to the fact that there were no bank specialists in Iran at that time, the law allowed the recruitment of Swiss or German nationals for the administration of the bank. The first CEO of the National Bank, Template:Ill, and its vice-president, Otto Vogel, came to Iran together with other experts from Germany. The number of bank employees on the opening day, including Iranian and German, did not exceed 27.Template:Cn
On Template:Date, the National Consultative Assembly granted Bank Melli Iran a monopoly on banknote issuance for 10 years, automatically renewable for another ten years if not formally canceled in the meantime. The BMI's first banknotes were originally intended to be introduced on Template:Date, but due to delays in issuance, they were eventually issued on Template:Date, the day of Nowruz; they coexisted for several months with those of the Imperial Bank of Persia, which were officially withdrawn in September 1932.<ref name=Bonine>Template:Cite book</ref>Template:Rp Also in 1932, the bank's long-term credit operations were spun off as the Iranian Agricultural and Industrial Bank (Template:Langx), later known as Bank Keshavarzi Iran.<ref name=BMIH/>
In 1936, Bank Melli Iran moved into a purpose-built modern head office on Ferdowsi Street, designed by German architect H. Heinrich, whose construction had started in 1933.<ref>Template:Cite web</ref>
In 1938, the bank's mortgage credit operations were similarly spun off as the Mortgage Bank of Iran, or Bank Rahni Iran.<ref name=BMIH/> In 1939, the saving fund of Bank Melli Iran was established under a law to encourage people to save money.
In the early 1940s, Bank Melli Iran open several regional branches that shared the same monumentalist style, all designed by architect Mohsen Foroughi, in Tabriz (1940), the Tehran Basaar (1941),<ref>Template:Cite web</ref> Isfahan (1941), and Shiraz.Template:R
In 1942, the bank was renamed National Bank of Iran in line with the new name of the country.<ref name=BMIH/>
Commercial bank
In 1960, the creation of the Central Bank of Iran put an end to the role of Bank Melli Iran as a bank of issue. Bank Melli Iran went on as a commercial bank.
In 1965, it opened its first international branch in Hamburg.<ref name=BMIH/> In 1967, it opened branches in London, which in 2002 were reorganized as a fully owned subsidiary named Melli Bank plc.<ref>Template:Cite web</ref>
Since the Islamic Revolution
After the Islamic Revolution, changes to the banking system were implemented in order to conform with Sharia law in the realm of Islamic banking and finance. The new law was passed in 1984. There are more than 3328 active branches inside, 14 active branches and 4 subsidiaries abroad and 180 offices.
In 2002, BMI established a Russian subsidiary, Mir Business Bank in Moscow. In 2004, it partnered with Bank Saderat Iran to establish Arian Bank in Kabul. In 2006, it also established a branch in Hong Kong.<ref name=BMIH/>
Operations
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Staff
Serving condition table of BMI employees by gender:<ref>Template:Cite web</ref>
| status | female | male | total |
| Employed | 3,263 | 36,042 | 39,305 |
| Employment status, 105 is disabled | 0 | 460 | 460 |
| Martyr (employed: 9, retired: 50) | 2 | 57 | 59 |
| retired prematurely | 616 | 3,402 | 4,018 |
| Other retirees | 1,618 | 14,505 | 16,123 |
| Dead (salaried: 7536) | 67 | 5,146 | 5,213 |
| total | 5,566 | 59,612 | 65,178 |
Subsidiaries
Sadad data company
In 1999, Sadad Data Company was registered at Companies Registration Office and Non-commercial Enterprises.
National Development Group
The National Development Group is an investment company, which is listed on the Tehran Stock Exchange.
Islamic banking
All banks in Iran must follow the banking principles and practices described in the Islamic Banking (Sharia) law of Iran passed in 1983 by the Islamic Majlis of Iran.<ref>Template:Cite web</ref> According to this law, banks can only engage in interest-free Islamic transactions (interest is considered as usury or riba and is forbidden by Islam and its holy book the Quran). The permitted commercial transactions involve exchange of goods and services in return for a share of the assumed profit. All such transactions are performed through Islamic contracts, such as mozarebe, foroush aghsati, joale, salaf, and gharzol-hassane. Details of these contracts and related practices are contained in the Iranian Interest-Free banking law and its guidelines.
Social responsibilities
- Public Utilities Projects: At present, the bank has been involved in 39 public utilities project more than 114 billion Rials.<ref>Template:Cite webTemplate:Dead link</ref>
- Children Support.<ref>Template:Cite webTemplate:Dead link</ref>
- Support for cultural and scientific projects.<ref>Template:Cite web</ref>
- Support for sports plans for releasing Diya prisoners .<ref>Template:Cite webTemplate:Dead link</ref>
- School building.<ref>Template:Cite webTemplate:Dead link</ref>
Financials
Template:As of 16 June 2008 (US$1 is approximately 133,130 Iranian rial (Rls)):<ref>Template:Cite web</ref>
- Total assets = Rls 360,517 billion
- Capitalization = Rls 36,487 billion
- Net income after tax = Rls 772 billion
- Total loans = Rls 163,595 billion
- Number of branches = 3,300
- Number of employees = 43,000
- Bank Melli Iran (BMI) has offered close to 30 percent of all credits to economic, production, industrial and services sectors.<ref name="iran-daily.com">Template:Cite web</ref>
- Online banking services offered by Bank Melli have registered a 370-percent growth in 2008.<ref>Template:Cite web</ref>
Mohammad Reza Hosseinzadeh, director of BMI, announced that the Islamic Republic of Iran owes over 220,000 billion Rials to BMI.<ref>Template:Cite news</ref> In 2009, the announcement of Mahmoud Reza Khavari's talks with ISNA news agency was published on the debt of 50 trillion Rials of Iranian government to the bank and the government's inability to repay the debt. But then, the news of "the government's inability to pay the debt" was denied by Khavari<ref>Template:Cite web</ref>
Offices and buildings
Bank Melli Iran has 18 international branches and services in 11 countries:
- Template:Flagicon Afghanistan (Kabul)
- Template:Flagicon Azerbaijan (Baku)
- Template:Flagicon Bahrain (Manama)
- Template:Flagicon France (Paris)
- Template:Flagicon Germany (Hamburg)
- Template:Flagicon Hong Kong (Hong Kong)
- Template:Flagicon Iraq (Baghdad & Basra)
- Template:Flagicon Oman (Muscat)
- Template:Flagicon Russia (Moscow)
- Template:Flagicon United Arab Emirates (Abu Dhabi – 4 branches, Dubai – 4 branches and Sharjah)
- Template:Flagicon United Kingdom (London)
Controversies
Civil lawsuit
Following the September 1997 suicide bombing in Jerusalem, five American students who had been wounded were awarded $251 million in compensatory and punitive damages against the government of Iran and the Iranian Revolutionary Guard Corps by Judge Ricardo M. Urbina, under the Flatow Amendment of the Foreign Sovereign Immunities Act, in accordance with Section 201a of the Terrorism Risk Insurance Act of 2002, which states that "in every case in which a person has obtained a judgment against a terrorist party on a claim based upon an act of terrorism ... the blocked assets of that terrorist party ... shall be subject to execution". Since most Iranian assets in the United States had been withdrawn after the embassy hostage crisis, the only substantial monetary asset left was approximately $150,000 in the Bank Melli's account in the Bank of New York. Before turning over the funds to the five students, however, the Bank of New York sued for a legal decision regarding its responsibilities in the case. The United States Department of Justice, speaking as amicus curiae in support of Bank Melli, advised that the bank had no responsibility for turning the funds over to the students; in March 2006, Judge Denise Cole ruled against them, and was upheld by the Second Circuit Court in April 2007. Bank Melli then withdrew the funds from Bank of New York.<ref name="sun">U.S. Helps Iranian Bank Withdraw, Then Seeks To Freeze Funds, Josh Gerstein, The New York Sun, 9 November 2007</ref>
On 5 March 2018, Bank Melli lost an appeal "related to credit card use in Iran" concerning "roughly $17.6 million that Visa Inc and Franklin Resources Inc" were holding for Bank Melli.<ref>Template:Cite news</ref>
United States sanctions
On 25 October 2007, the United States imposed unilateral sanctions against Iran. These sanctions include new measures to reduce Iran's ability to conduct financial transactions between the state-owned banks of Iran and United States citizens or private organisations.<ref name="Sanctions">US slaps sanctions on leading Iranian state-owned banks Agence France-Presse (25 October 2007).</ref> Bank Melli was included in these sanctions, on the grounds that, besides its other customers, Bank Melli provides financial services to Iran's nuclear and ballistic missile programmes.<ref name="Sanctions" /> A fact sheet released by the US Treasury Department also asserts that between 2002 and 2006 Bank Melli sent at least $100 million to Hamas, Palestinian Islamic Jihad, Hezbollah and other groups, via the Quds Force, a branch of the Iranian Revolutionary Guard.<ref name="sun" />
In a statement published on its website, BMI refuted the US allegations and denied that it has ever been involved in any "deceptive banking practices".<ref>BMI's announcement on US sanctions Template:Webarchive Bank Melli Iran.</ref>
European Union sanctions
On 16 June 2008, the European Union imposed further unilateral sanctions against Iran. These sanctions include the European Union freezing the assets of Bank Melli, in response to Tehran's refusal to suspend its uranium enrichment program.<ref>[1] BBC (16 June 2008).</ref> After the lifting of sanctions, BMI was the first Iranian bank to be reconnected to Swift.<ref>Template:Cite web</ref>
Related entities
Publishing company
After assignment of right to publish banknotes to BMI, a limited organization was created to publish the date of issue on banknotes. This organization evolved along with development of BMI; it was known as "BMI Printing House". Printing company of BMI received the publication license from Ministry of Culture and Islamic Guidance in order to allow publication of book and magazine; so it renamed "BMI Printing and Publishing Company".
Hospital
The Hospital of BMI was established to provide health care and to meet the medical needs of its employees in 1938. Following this, the current building of the Bank Hospital was built in 1973.
Bank Melli Iran Museum
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The Bank Melli Iran Museum is located in Template:Ill on Ferdowsi Street in the center of Tehran. The building was registered in the category of national works of Iran on 20 December 2000, under registration number 2930.Template:Cn
The museum opened with the presence of first vice president Eshaq Jahangiri on Template:Date. Its collection includes ancient objects from the Achaemenid, Sasanian and later eras, including coins, paintings, rugs and blankets.<ref>Template:Cite news</ref>
Leadership
- Template:Ill, September 1928 - September 1932
- Albert Schneider, September 1932 - April 1933
- Hossein Ala, April 1933 - March 1934
- Reza Gholi Amir Khosrovi, March 1934 - November 1939
- Mohamad Ali Farzin, November 1939 - October 1941
- Hossein Ala, October 1941 - December 1942
- Abul Hassan Ebtehaj, December 1942 - July 1950
- Ebrahim Zand, July 1950 - September 1951
- Ali Asghar Nasser, September 1951 - July 1952
- Mohammad Nassiri, July 1952 - August 1953
- Ali Asghar Nasser, September 1953 - April 1957
- Ebrahim Kashani, April 1957 - 1960<ref>Template:Cite web</ref>
- Kazem Najafi Elmi, December 1986 - 1989<ref>Template:Cite web</ref>
(Source:<ref>Template:Cite web</ref>)
See also
- Melli Bank, University of Tehran Branch
- Bank Markazi Iran
- Economy of Iran
- Islamic Banking
- Banking and insurance in Iran
- Companies of Pahlavi Iran
References
External links
- Template:Commons category-inline
- Bank Meli Web site Template:Webarchive (Persian)
- Bank Melli Web site Template:Webarchive (English)
- Bank Melli official page on Instagram
- State owned banks of Iran Template:Webarchive
- The Banker, "The start of an economic renaissance", 2006, available to registered users and subscribers
- Reuters – Iran sanctions
- AFP – Iran to shake up interest rates
Template:S-start Template:S-other Template:S-bef Template:S-ttl Template:S-aft Template:S-end Template:Banks of Iran Template:Central Bank of Iran Template:Authority control