Banking

As with any country, Iran has a banking industry to handle customers’ cash and offers various financial services. There are approximately 30 banks and 5 credit institutions, each having numerous branches. Due to the depreciation of the Iranian Rial, using cash is becoming increasingly uncommon so opening a bank account is more or less a necessity. Foreigners with a valid residence permit are able to open accounts but are limited in the services they can receive. Services typically available to most customers include:

• Current/checking accounts
• Savings/term deposit accounts
• Debit cards
• Internet banking
• Mobile banking
• Telephone banking

The current account will allow instant access to the funds in the account and a debit card is normally issued to make purchases at shops and online. Since the banking system of the Islamic Republic is supposed to be shariah compliant, interest is not applicable, however, a ‘provisional profit’ rate (sood) is applied instead. Banks typically use deposits to invest in a variety of assets, businesses and joint-ventures and part of the profits from these investments are then passed to customers in the form of a provisional profit rate.

Savings accounts offer higher provisional profit rates but the principal deposit is locked for the term of the account and will incur fees in order to access it earlier. The profit from these accounts is normally paid on a monthly basis and deposited into a different current account. Terms for savings accounts vary from 6-months to 5-years with the longer terms yielding the highest profits.

Internet and mobile banking are very common in Iran, providing users with convenient access to a wide range of banking services, including balance inquiries, fund transfers, and various transactions, without the need to physically visit a bank branch. To set up these services, users typically require a mobile telephone number, although it is worth noting that not all banks offer these services to foreigners. Branches of these banks are scattered throughout the city, with the majority having their main branch located on Amin Boulevard.

Selected Banks

Foreign Currency Accounts

Foreign currency accounts are also available in some Iranian banks. There are both advantages and disadvantages for foreigners to open such accounts. On the positive side, these accounts are a safe way of holding funds in foreign currencies hence providing a hedge against local currency fluctuations. However, there are some drawbacks to consider. One disadvantage is the limited availability of foreign currency ATMs in Iran, which may make accessing funds more challenging. Although rare, it may not be possible to withdraw the full amount one requires even within the branch due to economic or political circumstances.