this report includes the Iran financial markets and institutions. the report is compiled includind secondary dat from different sources such as articles, website, newspaper, books, etc.

1. 1

2. TABLE OF CONTENT
ISLAMIC REPUBLIC OF IRAN COUNTRY PROFILE…………………………….1
FINANCIAL MARKETS AND INSTITUTIONS OF IRAN…………………..…….2
TYPES OF FINANCIAL MARKETS AND INSTITUTIONS……………………….2
STOCK EXCHANGE OF IRAN & STOCK MARKET INSTRUMENTS……..……6
TRADING SYSTEM………………………………………………………….………8
STOCK MARKET INSTRUMENTS……………………………………….……….14
FINANCIAL CRISIS…………………………………………………………..……16
INVESTMENT AND INVESTMENT PATTERN………………………..…..……..19
RULES & REGULATIONSGOVERNING
FOREIGN INVESTMENT IN IRAN…………………………………….………...21
IRAN’S BANKING SYSTEM………………………………………….…………..23
BANKING ASSETS AND LIABILITIES………………………………………….27
CHANLLENGES FACED BY BANKS OF IRAN…………………………………29
CORPORATE GOVERNANCE IN IRAN…………………………..……………..32
OTHER INFORMATION I WANT TO SHARE…………………………..………34
REFRENCES
2

3. ISLAMIC REPUBLIC OF IRAN
COUNTRY PROFILE
Islamic Republic of Iran | Jomhuri-ye Eslami-ye Iran
Historically known as Persia, Iran was one of the greatest empires of
the ancient world, which was frequently invaded. Iran's hereditary
monarch, Shah Mohammad Reza Pahlavi, fled the country in 1979
after decades of corrupt and authoritarian rule, and mounting
religious and political unrest. Exiled Ayatollah Ruhollah Khomeini returned to lead an
Islamic revolution and formed the world's first Islamic republic the same year. An eightyear war with Iraq followed.
In the elections of 1992 and 1996, former president Akbar Hashemi-Rafsanjani's
support increased and at the presidential election of 1997 Mohammad Khatami,
Rafsanjani's cultural adviser, succeeded him. Khatami promised greater freedom and
tolerance and was supported mainly by women, younger voters and intellectuals.
In June 2005, Mahmoud Ahmadinejad, former mayor of the capital, Tehran, and famous
for his conservative approach and for rolling back reforms put in place by modernists
before him was elected president. He has not been shy of confronting the West and has
pushed ahead with a national nuclear programme that has brought international
condemnation.
3

4. FINANCIAL MARKETS AND INSTITUTIONS OF
IRAN
As of 2011, about 80% of the country's wealth was deposited with state banks and the
remaining 20% with private banks. Iran's financial institutions are:



Banks
Finance & Credit Institutions
"Gharz al-Hasaneh" Funds (Islamic non-profit granting funds)
TRADING SYSTEM
Trading in IME is based on open outcry auction using electronic trading platform, an
interaction of bids and offers made by the buying and selling brokers. Orders, already
placed by the clients, are entered in the system by the brokers sitting behind their
stations in the trading floor. The system processes the orders and executes the
transaction upon matching of the bid and offer prices.
TYPES OF FINANCIAL MARKETS AND
INSTITUTIONS
COMMERCIAL BANKS
Commercial banks are authorized to accept checking and savings deposits and term
investment deposits, and they are allowed to use promotional methods to attract
deposits. Term investment deposits may be used by banks in a variety of activities such
as joint ventures, direct investments, and limited trade partnerships (except to
underwrite imports). However, commercial banks are prohibited from investing in the
production of luxury and nonessential consumer goods. Commercial banks also may
engage in authorized banking operations with state-owned institutions, governmentaffiliated organizations, and public corporations. The funds received as commissions,
fees, and returns constitute bank income and cannot be divided among depositors.
BOND MARKET
The Central Bank must obtain approval from the Majlis in order to issue participation
papers. As at 2012, regulations for fixed income instruments oblige that a market maker
always buys back the papers from the sellers in the secondary market at par value if
there are no other buyers present.
4

5. TEHRAN STOCK EXCHANGE
The Tehran Stock Exchange (TSE) is Iran's largest stock exchange, which first
opened in 1967. The TSE is based in Tehran. As of May 2012, 339 companies with a
combined market capitalization of US$104.21 billion were listed on TSE. TSE, which is
a founding member of the Federation of Euro-Asian Stock Exchanges, has been one of
the world's best performing stock exchanges in the years 2002 through 2011. TSE is an
emerging or "frontier" market.
DERIVATIVES MARKET
As of 2009, the Iranian Oil Bourse was a spot market for petrochemical products mainly,
with plans to introduce sharia-compliant futures contracts for crude oil and
petrochemicals in the future. Trading takes place through licensed private brokers
registered with the Securities and Exchange Organization of Iran.
With help of Bahrain-based International Islamic Financial Market and New York-based
International Swaps and Derivatives Association, global standards for Islamic
derivatives were set in 2010. The ―Hedging Master Agreement‖ provides a structure
under which institutions can trade derivatives such as profit-rate and currency swaps.
OTC MARKET
In 2010, 5.5% of the Mobile Telecommunication Company of Iran shares were offered
on the Iranian Over-The-Counter (OTC) market, at a value of $396 million. This was the
largest IPO-to-date in the Iranian OTC equity market. In 2011, Pardis Petrochemical
Co., the largest producer of urea and ammonia in the Middle East, Amir Kabir
Petrochemical Co., Pasargad Bank, Yazd Alloy Steel Co. and Ravan Fanavar Co (a car
auto part manufacturing company) went all public.
SUKUKS
An Islamic Fixed income instrument, which looks similar to an asset-backed debt
instrument. As of July 2011 and for the first time since the law was passed 3 years ago,
Iranian companies such as Mahan Airlines and Saman Bank have respectively issued
$30 million and $100 million worth of this type of bonds. Iran will also issue $15 billion in
sukuk (Islamic Sharia-based) bonds in 2012 to be invested in the domestic oil industry
5

6. INSURANCE INDUSTRY
The Central Insurance (Bimeh Markazi Iran) company is in charge of regulating this
sector in Iran. Five state-owned insurance firms dominate the sector, four of which are
active in commercial insurance. The leading player is the Iran Insurance Company,
followed by the Asia Insurance Company, the Alborz Insurance Company and the Dana
Insurance Company. Insurance companies Asia, Dana and Alborz will be listed on the
stock exchange in 2009 after review and improvement in their financial accounts,
internal regulations and organizational structure nationwide. At the end of 2008, there
were 20 insurance firms active in the market, only 4 of which were state-owned (with a
75% market share). Alternate 2006-statistics give the market share for private insurance
companies at 54% and 46% for governmental insurance companies.
Parsian Insurance became the largest privately owned company to be listed on the
Tehran Stock Exchange in 2010. Parisan is the third largest insurance provider in Iran.
In 2008, the total insurance premiums generated in Iran were $4.3 billion. This is less
than 0.1% of the world’s total, while Iran has approximately 1% of the world’s
population. The insurance penetration rate is approximately 1.4%, significantly below
the global average of 7.5%. This underdevelopment is also evident in product diversity.
Approximately 60% of all insurance premiums are generated from car insurance. There
are about 14 million vehicles in Iran and 90 percent of them are insured (2012). Of the
10 million motorcycles that operate on Iran's roads only 2 million are insured. Also, 95%
of all premiums come from general insurance contracts and only 5% relate to life
products (against world average of 58% for life insurance in 2011). One of the defining
characteristics of the economy is entrenched high inflation (and expectations) thanks to
persistent monetization of fiscal deficits. This produces an environment in which no
prudent person would enter into a long-term savings contract. According to Business
Monitor International, unless and until economic policies in Iran change radically, the
reality of the insurance sector will fall a long way short of its potential.
Blood money was $67,500 in 2011, down from $90,000 a year before. Starting in 2012,
Iran is also insuring its own fleet of oil tankers.
.
6

7. ISLAMIC BANKING
In 2009 Iranian banks account for about 40 percent of total assets of the world's top 100
Islamic banks. Three of the leading four Islamic banks are based there; Bank Melli Iran,
with assets of $45.5 billion came first, followed by Saudi Arabia's Al Rajhi Bank, Bank
Mellat with $39.7 billion and Bank Saderat Iran with $39.3 billion. ―Iranian banks are still
the predominant Islamic banking players, holding seven out of the top 10 ranks and 12
of the 100,‖ the Asian Banker research group reported. According to CIMB Group
Holdings, Islamic finance is the fastest-growing segment of the global financial system
and sales of Islamic bonds may rise by 24 percent to $25 billion in 2010.
IRAN MERCANTILE EXCHANGE
Iran Mercantile Exchange (IME) is a commodities exchange located in Tehran, Iran. It
was founded in 2006. IME trades in agricultural, industrial and petrochemical products
in the spot and futures markets. It is mainly a domestic or regional market with the
ambition to become more international in the future .
OIL BOURSE
The Government of Iran decided to establish the oil and petrochemicals exchange and
the responsibility of creating this new exchange was delegated to IME Company. The
first phase was launched on February 17, 2008 by executing the transactions of
petrochemicals and chemicals which has been running successfully and the second
phase is on the verge of launching. With the completion of the second phase, crude and
by-products of oil can also be traded on the exchange in both Iranian Rial and major
foreign currencies (except USD).Kish Island is the venue for trading the oil contracts. It
is a free trade zone. The Islamic Republic also wants to encourage local investors to
participate in the oil market as it tries to reduce the state’s role in the country’s energy
industry.
7

8. STOCK EXCHANGE OF IRAN & STOCK
MARKET INSTRUMENTS
TEHRAN STOCK EXCHAGE (TSE)
The Tehran Stock Exchange (TSE) is Iran's largest stock exchange. The TSE is based
in Tehran. The concept of stock industrialization dates to 1936, when Bank Melli,
together with Belgian experts, issued a report detailing a plan for an operational stock
exchange in Iran. However, the plan was not
implemented prior to the outbreak of World War II,
and did not gain traction until 1967, when the
Government revisited the issue and ratified the
"Stock Exchange Act".
Initially limited in size and scope, the Tehran Stock Exchange (the "TSE") began
operations in 1967, trading only in corporate and government bonds. Iran's rapid
economic expansion in the 1970s, coupled with a popular desire to participate in the
country's economic growth through the financial markets, led to a demand for equity.
The Government became actively engaged in the process, by granting shares to
employees of large state-owned and family-owned enterprises. Market activity
increased substantially, as both companies and high net worth individuals participated
in the new-found wealth associated with the TSE.
As of May 2012, 339 companies with a combined market capitalization of US$104.21
billion were listed on TSE. TSE, which is a founding member of the Federation of EuroAsian Stock Exchanges, has been one of the world's best performing stock exchanges
in the years 2002 through 2011.TSE is an emerging or "frontier" market.
The most important advantage that Iran's capital market has in comparison with other
regional markets is that there are 37 industries directly involved in it. Industries such as
the automotive, telecommunications, agriculture, petrochemical, mining, steel iron,
copper, banking and insurance, financial mediation and others trade shares at the stock
market, which makes it unique in the Middle East.
The second advantage is that most of the state-owned firms are being privatized under
the general policies of article 44 in the Iranian constitution. Under the circumstances,
people
are
allowed
to
buy
the
shares
of
newly-privatized
firms.
8

9. MISSION
Launching a fair, efficient and transparent market equipped with diversified instruments
and easy
access to create added value for the stakeholders
VISION
The region's leading Exchange and country's economic growth drive
GOALS

Increasing the share of capital market in financing the economic productive
activities

Applying effective rules and procedures to protect the market's integrity and
shareholders' rights

Expanding market with the use of updated and efficient technology and
processes

Developing financial knowledge and improving investment and shareholding
culture in Iran

Facilitating market access by means of information technology

Observing accountability and transparency in cooperation with the stakeholders

Constant expansion of the company's intellectual properties and human
resources.
Attention to promotion of the private sector and new interest in the TSE brought life
back to the market. However, lack of regulation and out-of-date legal framework led
to crisis in the market leading to certain "meltdowns" until today. The market has
experienced its share of highs and lows in the past years including topping the World
Federation of Exchanges' list in terms of performance in 2004 to tumbling down to
last place in 2007 due to political uncertainties in the region.
9

10. ROLES OF TSE
Legislation establishing Tehran Stock Exchange (TSE) was formally enacted in 1966
and TSE began operation on April 6, 1967. Forty years after the establishment of the
TSE, a new Securities Act was passed in November 2005. Under this Act, TSE have
been demutualized.
As defined in the Article of Association, TSE's primary roles are:






Establishing, organizing and managing of the Stock Exchange in
order to trade listed securities
Listing of securities
Prescribing membership requirements for members and
supervising their performance, and regulating their activities
overseeing the transactions of the Exchange listed securities
Monitoring the performance of issuers of the listed securities
Processing and disseminating the information regarding the securities orders and
transactions of securities
TRADING PLATFORM
The Tehran Stock Exchange (TSE) has started an ambitious modernization program
aimed at increasing market transparency and attracting more domestic and foreign
investors. Concrete measures that have been taken in the planning and operations of
the stock exchange such as the settlement system, geographical expansion, new
exchange laws in order to attract local and foreign capital. The TSE has installed the
new trading system which has been purchased from Atos Euronext Market Solutions
(AEMS)
in
2007.
The new system makes it possible to purchase and sell stocks on the same day. The
system has also made it possible for 2,000 brokerage stations to work simultaneously,
while the number was just about 480 in the past. The rise in electronic dealing, non-stop
input and updated data on orders, transactions and indices are among other features of
the new system. The new system has made it possible to link the stock market to the
international bourses. The bourse can now handle 700 transactions per second and
150,000 transactions per day.
10

11. The trading system is an order driven system, which matches buying and selling orders
of the investors. Investors can place their orders with TSE accredited brokers, who
enter these orders into the trading system. Then, the system automatically matches buy
and sell orders of a particular security based on the price and quantity requirements.
The mechanism for which the price of equities is determined is as follows:


The best price (price priority)
Time of order priority
The trading system also generates and displays details of current and historical trading
activity, including prices, volumes traded and outstanding buy and sell orders. This
ensures that investors have the required information to be able to take informed
investment decisions.
The range of price movements is typically
restricted to 3% daily either way from last
closing. Restriction on Rights is 6%. This
can be changed in specific situation by the
Board of the TSE in case of unusual price
movements resulting in an extremely high
or low P/E ratio. Short selling is not
permitted. There are no minimum trading
lots. According to the Iranian Commercial
Law, companies are prohibited from share
repurchases. TSE Services Company
(TSESC), who is in charge of the site, supplies computer services. TSESC is a member
of Association of National Numbering Agencies (ANNA).
Starting March 2011, investors will be able to trade in the Iranian stock market through
the Internet from anywhere in the world (on a trial basis since July 2010), or get all the
necessary information before traveling to Iran. There are 87 online service providers
which offer round-the-clock information and services about Iran and its stock market. As
of September 2011, 40,000 shareholders are registered and conducting transactions
online.
The Government of Iran directly holds 35 percent of the TSE, while securing another 40
percent through pension funds and investment companies such as the Social Security
Investment Company, one of the largest institutional investors on the TSE. Bonyads
also play a leading role in TSE trading. In 2005 fewer than 5 percent of Iranians owned
stock.
11

12. The Government is promoting the shareholding culture in Iran. By March 2010, 3.219
million shareholders had registered in the TSE, with investment firms having 562,375
shareholders, which make it the "favorite industry" in the stock market. By September
2011, the number of registered shareholders in the TSE had increased to 4.5 million.
HISTORICAL HIGHLIGHTS
1967
The Tehran Stock Exchange commenced operation on Feb. 4.
1969
Trade of Treasury and Land Reform bills started.
1972
Stocks of 23 companies and three bonds were traded at TSE.
1983
The law for Usury-Free Banking was enacted. Trading in bonds was
abandoned.
1988
Eight-year war between Iran and Iraq came to an end.
1989
Sharp increase in trade from the beginning of autumn.
1992
1995
2002
TSE admitted as a full member of the International Federation of
Stock Exchanges.
TSE joins the Federation of Euro-Asian Stock Exchanges as one of
its founding members.
Capital market physical development occurs; principal steps in
dissemination of information, education and development of financial
products.
2003
Listed companies are allowed to issue corporate bonds
2005
The TSE new law is ratified by parliament. Increase the number of
Regional floors to 21.
2006
TSE Demutualization is accomplished
2007
Launching Privatization Plan of State-Owned Companies
2008
2010
2012
Establishment of SMEs Market (Iran Farabourse) in the Capital
Market
Foreign Investment Deregulation – Launching Single – Stock Futures
Market and On-line Trading Services – Being Elected As the
Chairman of FEAS Until 2012
Launching A New Derivatives Product: Embedded Put Option
12

13. 2011: The best performing industries in 2011, in terms of total sales, were the banking
and automotive sectors. The worst performers were home appliances and electronics.
In terms of gross profit margin, mining, telecommunications, and oil and gas exploration
& production were the best performing industries. Sales totals of the top 100 Iranian
companies on the list ranged from $12.8 billion or the top ranking company, Iran
Khodro, to $318 million for the 100th company.
2012: Companies showing the most profit, are mostly in pharmaceutical, petrochemical
and steel businesses. The sharp decline of the Rial in 2012 has made exports more
competitive. Other favoured companies are state-owned industrial companies that rely
on a mostly domestic supply chain, turning locally-produced raw materials into products
targeting Iranian consumers.
OVERVIEW OF TURNOVER
No. Shares Traded
(million)
Daily
(million $)







July-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
June-10
20,256
5,747 53.9
3,202 35.8
4,669 56.7
26,675
1,547 19.8
17,837
100.7
436.3
112.7
116,562 (total)
93.83 (average)
CENTRAL
(CSDI):
SECURITIES
DEPOSITORY
OF
IRAN
CSDI is responsible for clearing, settlement, depository, and registry (CSDR) or all posttrade activities for the Iranian Capital Market. All securities are held in immobilized or
dematerialized forms. The CSDI is going to act as the central counterparty (CCP) of all
trades in the future. For TSE, a central securities depository with the records of the final
shareholders of all listed companies is maintained.
13

14. LEGAL STRUCTURE
The new Securities Act which is more comprehensive and advanced than the previous
one was passed on November 16, 2005 by the Iranian parliament to support investors'
rights and aimed at organizing, preserving and developing a transparent, fair and
effective market.
Under the new Act, the Securities & Exchange High Council (Council) and the
Securities and Exchange Organization (SEO) were introduced and created as
regulators of Iranian capital market and TSE has been demutualized i.e. the
membership organization entity was turned into a public joint stock company.
The Council is the highest authority and is responsible for all related policies, market
strategies, and supervision of the market. The Chairman of the Council will be the
Minister of Economy & Finance; other members are: Minister of Commerce, Governor
of the Central Bank of Iran, President of the Chamber of Commerce, Attorney General,
Chairman of SEO, representatives of the active market associations, three financial
experts requested by the Minister of Economy & Finance and approved by the Council
of Ministers, and one representative from each exchange.
The SEO will be responsible for administration and supervisory duties, governed by the
Board of Directors. The SEO's Board of Directors will be elected by the Council.
IRANIAN CAPITAL MARKET
14

15. FUNDS MANAGEMENT
As of 2009, 21 mutual funds managed by permitted brokerage firms and investment
banks are investing in the TSE according to the investment funds regulation. Mutual
funds are open ended and their
operation permission is issued by the
Iran
Securities
and
Exchange
Organization (SEO). Since then, 41
funds have been established, four of
which are fixed income funds and the
remainder of which are equity funds. As
of August 2010, total assets under
management within the Iranian fund
management industry amount to
approximately $230 million with great
potential for development. As of
December 2010, TSE had a market
capitalization of $84 billion. TEDPIX,
TSE's Price and Dividend Index, became the world’s second-best performing equity
index in 2010.
2012: TSE’s overall index hit a new record high in October 2012 surpassing 31,000
points. Export-oriented companies have been favoured because of a sharp decline in
the value of the Iranian rial over 2012
FOREIGN PORTFOLIO INVESTMENT
The performance of the TSE has had no
correlation with major exchanges or
emerging stock markets over the past few
years and not even with the oil price. So far,
the Tedpix index has been driven by
domestic investors, including wealthy
Iranians, public sector pension funds and
the investment arms of state-owned banks.
For the index to prosper in the long run,
more foreign investors need to make
significant share purchases. As at 2009,
foreign portfolio investment accounts for
only about 2 percent of the stock market in Iran.
15

16. STOCK MARKET INSTRUMENTS
OTC MARKET
Since 2009, Iran has been developing an over-the-counter (OTC) market for bonds and
equities (aka Farabourse). Its shareholders include the Tehran Stock Exchange
Corporation (20%), several banks, insurance companies and other financial institutions
(60%), and private and institutional shareholders (20%). As of July 2011, Farabourse
has a total market capitalization of $20 billion and a monthly volume of $2 billion. The
OTC Market has been formed to promote the issuance and trade of various financial
instruments and remove the existing gap that inhibits the financing of industrial firms via
the securities market.
BROKERS
Trading takes place through licensed private brokers registered with the Securities and
Exchange Organization of Iran. Thirty-one of the 88 brokerages active in the TSE are
licensed to trade the futures contracts. The leverage for futures contracts is set at 1-to10. TSE will only deal in the derivatives through electronic trading.
ELECTRONIC TRADING
Starting March 2011, investors will be able to trade in the Iranian stock market through
the Internet from anywhere in the world (on a trial basis since July 2010), or get all the
necessary information before traveling to Iran. There are 87 online service providers
which offer round-the-clock information and services about Iran and its stock market. As
of September 2011, 40,000 shareholders are registered and conducting transactions
online.
TRADING FEES
As of July 2010, trading fees include:


Equities and rights: 0.55% payable by the sellers and 0.5% the buyers.
Participation bonds: 0.1% of transaction value payable by both the buyer and
seller with a maximum of 100 million IRR.
16

17. NEW PRODUCTS AND SERVICES
Presently, TSE trades mainly in securities offered by listed companies. Equities and
Corporate Bonds are being traded at TSE at the moment. The plan is to introduce other
financial instruments in the near future. The introduction of project-based participation
certificates that bear a fixed annual return during the period of the project and promise
the final settlement of the profit at the date of its completion, has diversified the market.
FUTURES
In 2008, commodity Futures came onto the Iran Mercantile Exchange (IME). In July
2010, TSE introduced six single-stock futures contracts based on Parsian Bank and
Karafarin Bank, which will expire in two, four and six months. Thirty-one of the 88
brokerages active in the TSE are licensed to trade the futures contracts. The leverage
for futures contracts is set at 1-to-10. TSE will only deal in the derivatives through
electronic trading. In the TSE’s derivatives market, over 13,200 single stock futures
contracts were traded in 2011 with a value of over 510 billion Rials.
OTHER FINANCIAL INSTRUMENTS
17

18. FINANCIAL CRISIS
 IRAN'S EXTERNAL DEBTS CUT BY $10B, HIT
$7.2B: CENTRAL BANK CHIEF
Report by Tehran Times
Iran's external debts decreased by $10 billion in the past Iranian calendar year, which
ended on March 20, IRNA quoted Iran's Central Bank Governor Mahmoud Bahmani as
saying on Sunday. The external debts stood at $7.2 billion compared with $17.3 billion
in the year which ended in March 2012, he added.
He put the liquidity growth rate at 30.8 percent in the past year and said that liquidity
decreased by 1.9 percent in the first Iranian calendar month compared with the last
month of the past year.Meanwhile, Bahmani said that nothing more can be done to curb
inflation, the Tasnim News Agency reported.
"The [inflation] rate is very high. But, what can we do? We did our best to reduce the
inflation, but that was all we could do," he said.Last year, the central bank paid 1.956
trillion rials (about $155 million) in financial facilities, 31.7 percent of which was paid to
the production and industry sector, he noted.
... Payvand News - 05/27/13 ... --
18

19.  JAPANESE BANK FREEZES IRANIAN ASSETS
By Michiyo Nakamoto in Tokyo
One of Japan’s biggest banks has frozen assets belonging to the Iranian central bank
after an order from a US district court which is pursuing Tehran for $2.6bn in
compensation awarded to victims of a 1983 bomb attack on US marines in
Lebanon.Bank of Tokyo Mitsubishi UFJ moved after receiving the order this month but
submitted an objection to the New York court on the grounds that it does not have
jurisdiction over assets held in Japan.
Japanese banks recently won an exemption from US sanctions which come into force
on July 1. After that date the US will have the power to impose sanctions on any
commercial banks handling Iranian imports if the country they belong to has not
―significantly reduced‖ the volume of oil imports from Iran.
Additional reporting by Ben McLannahan, Tokyo.
 IRAN'S CENTRAL BANK TO ISSUE LARGER
BANKNOTES, DONYA SAYS
By Ladane Nasseri
Iran’s Central Bank plans to issue banknotes with twice the value of the largest ones in
circulation, Donya-e-Eqtesad reported, citing Majid Saniei, an official at the financial
institution. The bank will start printing 200,000-rial ($16) banknotes as soon as it
receives permission from the Economy Ministry and will release the new notes into
circulation in the Iranian new year starting March 21, the Tehran-based daily quoted
Saniei, head of Iran’s security and minting organization, as saying.
The Central Bank is also seeking approval for 500,000-rial notes and plans to introduce
these in two years’ time, Saniei said. Iran’s largest banknote at the moment is 100,000
rials. The rial has weakened in the past year as the Persian Gulf country battles U.S.
and European Union economic sanctions which have contributed to an inflation rate
nearing 30 percent. Iran’s Central Bank estimates inflation will rise to between 30.6%
and 31.5% in the Iranian month of Esfand ending March 20, Central Bank Governor
Mahmoud Bahmani said last month. Iran is at loggerheads with Western powers over its
nuclear program.
19

20.  UK SUPREME COURT RULES AGAINST BAN ON
IRAN'S BANK MELLAT
Britain’s Supreme Court has overturned a ruling against Iran's Bank Mellat over its
alleged links to Tehran's nuclear energy program.
On Wednesday, the highest British court ruled that the UK government was wrong to
have imposed sanctions on the Iranian bank in 2009, and that the Treasury directive
was
―irrational‖
and
―disproportionate.‖
The decision comes after the European Union
General Court decided in January to quash
sanctions imposed against Bank Mellat in July
2010. Bank Mellat has stated that it will explore
legal channels and sue individual governments
for the damages it has suffered as a result of
sanctions. The illegal US-engineered sanctions
were imposed based on the unfounded accusation that Iran is pursuing non-civilian
objectives in its nuclear energy program. The Court ordered removal of Bank Saderat
sanctions on Wednesday saying that the EU has failed to provide evidence that the
bank is involved in Iran's nuclear energy program has also been the target of anti -Iran
sanctions.
 Iran Rial Crisis: Currency Fall Leads To Tightened
Measures
By ALI AKBAR DAREINI and BRIAN MURPHY
TEHRAN, Iran -- Iranian authorities used aggressive measures Wednesday in an
attempt to halt the nosedive of the country's currency, making arrests, vowing to stamp
out sidewalk money changers and warning merchants against fueling the mounting
public anger over the economy.
There were unconfirmed reports of sporadic violence. Associated Press photos showed
riot police blocking a street with the charred hulks of a garbage can and a motorcycle
that had been set on fire. Smoke was rising from the area in central Tehran near the
main bazaar.A declining currency causes shifts in an economy such as making
imported goods more expensive.
Although the currency crisis is blamed on a combination of factors – including internal
government policies – the rush to dump rials appears to reflect an underlying perception
that international sanctions have deepened problems such as runaway inflation and
soaring prices for imports and that the only safe hedge is to grab dollars or euros.
20

21. INVESTMENT AND INVESTMENT PATTERN
REASONS TO INVEST IN IRAN
A unique geographical location at the heart of a cross-road connecting the
Middle East, Asia and Europe, coupled with many inter- and trans-regional
trade, customs, tax and investment arrangements;
MARKET POTENTIALS AND PROXIMITY
Vast domestic market with a population of 68 million growing steadily as well as
quick access to neighboring markets with approximately 300 million inhabitants;
21

22. ABUNDANT NATURAL RESOURCES
Varied and plentiful reserves of natural resources ranging from oil and gas
to metallic and non-metallic species reflecting the country’s accessibility to
readily available raw materials;
INVESTMENT LEGISLATION
Enactment of the new Foreign Investment Promotion and Protection Act (FIPPA)
to substitute the former Law Concerning Attraction and Protection of Foreign
Investments in Iran (LAPFI) by providing full security and legal protection to
foreign investments based on transparency and international standards.
22

23. RULES & REGULATIONSGOVERNING FOREIGN
INVESTMENT IN IRAN
The legal corpus governing foreign investment in the Islamic Republic of Iran
constitutes the Foreign Investment Promotion and Protection Act ( FIPPA) and
the FIPPA’s Implementing Regulations, as well as legislation applicable for
the establishment and conduct of economic activities in the country. While
the prospective investors are recommended to get full knowledge about the
legislation directly related to their interest, they are also advised to get familiar
with certain legislation which is fundamental in their daily affairs, such as
laws pertaining to companies formation and administration (Commercial CodeCompany Law); registration of companies,
branches and representative
offices; import/export regulations; taxation; industrial and intellectual property
protection; status of foreign nationals ( entry, resident and work permits); banking
and insurance; free and special economic zones regulations, etc.Since 1955, the
legal framework of Iran’s foreign investment regime was defined under the Law for the
Attraction and Protection of Foreign Investments (LAPFI). Moreover, in line with
reforms in the overall economic framework, Iran’s parliament undertook to propose and
approve a plan concerning a new foreign investment law entitled: The Foreign
Investment Promotion and Protection Act (FIPPA) which was ratified in May 2002.
FIPPA replaced the LAPFI which was in effect since 1955. FIPPA’s replacement of
LAPFI has further enhanced the legal framework and operational environment for
foreign investors in Iran.
Some specific enhancements introduced by FIPPA for foreign investments in Iran can
be outlined as follows:





Ä Broader fields for involvement by foreign investors including in major
infrastructure;
Ä Recognition of new modes of foreign capital exposure in addition to Foreign
Direct
Investment, e.g.
project financing, Buy-Back arrangements and
BOT schemes;
Ä Streamlined and fast-track investment licensing and approval process;
Ä Creation of a one-stop institution called the ―Center for Foreign Investment
Services‖ at the Organization for Investment, Economic and Technical
Assistance of Iran (OIETAI), for focused and efficient support of foreign
investment undertakings in Iran;
Ä Further liberalization of foreign exchange mechanisms as enjoyed by foreign
investors;
23

24. 
Ä Introduction of new legal options governing the Government-Investor(s)
relations.
Clearly, the ratification of the FIPPA and the approval of its implementing regulations by
the Council of Ministers represented a significant complement to a whole host of
reforms taking place in Iran’s general macroeconomic framework and structural
mechanisms. The trend in foreign investment applications in Iran since the ratification
of the FIPPA demonstrates that the new economic environment and the enhanced
foreign investment legal and regulatory regime have tapped a great foreign investment
potential for Iran that can be realized at a more accelerated pace through a concerted
effort aimed at transparent communication of the latest status of Iran’s dynamic
economic and foreign investment framework.
The Government of the Islamic Republic ofIran welcomes foreign investment in all
areas of economic activity by foreign persons including real persons as well
as juridical entities. In accordance with Article (1) of the FIPPA, the term
Foreign Investor is defined to be natural persons and legal entities as wells
Iranian nationals
and companies either residing in Iran or abroad. The
foreign investors by importing capital as defined in a very broad and
diversified form, being in cash or in kind, or being machinery and equipment,
raw materials, parts, specialized services as well as intellectual property for the
purpose of investment in industry, mining, agriculture and services shall be
eligible to enjoy the privileges and facilities provided under the FIPPA. The
advantages and facilities shall be granted to foreign investors who obtain
the Investment
License. In general, foreign investment in Iran is free for all investors but such
facilities and privileges are only granted to those investors who seek the
FIPPA's coverage by way of submission of an application to the OIETAI, which
is the central government agency to receive, license and protect the
interests of foreign investors throughout the lifetime of their operation in
Iran, notwithstanding the type and the manner of investment.
In fact, the interests and rights of foreign investors under the FIPPA are fully
recognized and secured against non-commercial risks which would simply
commit the Iranian Government not only to facilitate the free flow of
capital repatriation but also the full and fair compensation against acts of
Government towards expropriation as well as interruption of activities of the
foreign investors. Under FIPPA, foreign capital is defined in a very broad and
diversified manner and can be in cash or in kind, being machinery and equipment, raw
materials, parts, specialized services as well as intellectual property.
24

25. IRAN’S BANKING SYSTEM
INTRODUCTION
The pre-revolutionary banking system in Iran was dominated by western patterns. By
1979, there were 36 banks operating in Iran including many internationally jointventures banks. Following the Islamic Revolution (1979), as a result of the transfer of
deposits abroad, and problems in collecting outstanding debt, most of the private banks
were left in a precarious position.
Consequently the need for an effective administration of the newly nationalized banks
and thereby achieving uniformity in rendering newly adopted Islamic banking services,
granting credit facilities and adopting a unified policy in other key economic, financial
and monetary areas, necessitated the grouping of the newly nationalized banks into two
main categories. Therefore, in early 1980 the 36 banks were merged into 9 banks
comprising of 6 commercial and 3 specialized banks.
Concurrent with nationalization, studies were also being made on Islamization of the
banking system, which culminated in the Law on Usury-Free Banking ratified by the
Parliament in 1983.
Today Iran's banking system is still dominated by 11 state-owned institutions, including
seven commercial banks and four specialized banks, which jointly hold approximately
85% of the Iranian banking sector. In addition, there exist six private banks, two private
credit institutions, a growing number of credit co-operatives and three Free Zones
based branches of foreign banks.
Presently, a major initiative is underway for privatization and modernization of the
Iranian banking industry. In line with new macroeconomic policies of the government,
banks are gradually reducing interest rates, introducing new banking services and
expanding their international network.
Government debt to the banking sector is low, estimated at about 3% of GDP and 30%
of budget revenues in 2007 and is mostly domestic. All domestic debts are denominated
in local currency. The growth of credit granted to the private sector is expected to
remain strong, as it has been for several years, rising from 35% of GDP in 2001 to an
estimated 51% of GDP in 2005. The inflow of oil revenues inevitably adds liquidity to the
financial system. Certain banking reforms permitting an increase in financing are also
responsible for higher rates of consumption and private investments.
25

26. Lending and deposit rates of state-owned banks are still set annually by the Monetary
and Credit Council, but the share of new credit that state-owned banks are allowed to
allocate themselves increasing, and currently stands at 45% with different ceilings for
specific sectors in line with the adjectives set out in the prevailing five year development
plan.
Iran banking system comprises of central bank, commercial banks and other financial
institutions like insurance, mutual funds. Besides that Iran also have a well structured
Islamic banking system.
COMMERCIAL BANK
Commercial banks are authorized to accept checking and savings deposits and term
investment deposits, and they are allowed to use promotional methods to attract
deposits. Term investment deposits may be used by banks in a variety of activities such
as joint ventures, direct investments, and limited trade partnerships (except to
underwrite imports). However, commercial banks are prohibited from investing in the
production of luxury and nonessential consumer goods. Commercial banks also may
engage in authorized banking operations with state-owned institutions, governmentaffiliated organizations, and public corporations. The funds received as commissions,
fees, and returns constitute bank income and cannot be divided among depositors.
Further the commercial bank includes the following types.
Specialized government Banks includes
26

27. CENTRAL BANK OF IRAN
The Central Bank of the Islamic Republic of Iran (CBI)
(Persian: ‫ , بانک مرکزی جمهوری اسالمی ايران‬Bank Markazi Jomhouri Islami Iran) is the central
bank of Iran. It is entirely
government owned. Among
its major purposes are:
maintenance of the value of
the
national
currency,
balance of payments as well
as facilitating trade transactions and contributing to the economic advancement of the
country.
The Central bank is in charge of laying and implementing monetary and credit policies
of the country. Laying exchange policies and determining exchange rates are among
the functions of Bank Markazi. The importation of goods, issuance of documentary
credits and registration of orders for documentary bills of exchange for imports are also
done in accordance with the policies of the Central Bank. It is a member central bank of
the Asian Clearing Union.
According to the Monetary and Banking Law, rectified at 18 Tir 1351 and the
amendments thereto, the organs of the Bank Markazi Jomhuri Islami Iran are as follows:
- General Assembly
- Money and Credit Council
- The Executive Board
- The Note Reserve Control Board
- The Supervisory Board
27

28. ISLAMIC BANKING
In 1983 the Islamic Banking law of Iran was passed by the Majlis. According to this law,
Iranian banks can only engage in interest-free Islamic transactions (interest is
considered as usury or riba and is forbidden by Islam and the holy book of Qur’an).
These are commercial transactions that involve exchange of goods and services in
return for a share of the assumed "profit".
Iran uses what are officially termed "provisional" interest rates, as rates paid to
depositors or received from borrowers should reflect the profits or losses of a business.
Under these rules, deposit rates, known as "dividends", are in theory related to a bank's
profitability. In reality, however, these dividends have become fixed rates of return—
depositors have never lost their savings because of losses made by the banks and
almost never received returns larger than the provisional ex-ante profit rates. Interest
charged on loans is presented as "fees" or a share of corporate profits.
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 outlined in the Iranian Interest-Free banking law and its guidelines.
This law describes and authorizes an Iranian Shiite version of Islamic commercial laws.
Iran’s banking system adheres to Islamic rules that prohibit earning or paying interest.
Having commenced its activities some three decades ago, the Islamic Banking system
has enjoyed favorable growth and attracted the attention of many investors and bankers
around the world. Instead of paying "a fixed interest", which is forbidden in Islamic law,
Islamic banking shares its profit and loss with customers. In this system, although the
banks offer their clients on account interest, this is rate may vary depending on the
bank's performance by the end of the fiscal year.
Based on this system, a bank has a close link with its clients and they make joint
projects to sell to a third party. What is focused in Islamic banking is the objective of
Fixed Usury Free Banking for establishing social justice, which tends to be the first
objective of Islamic economic system.
In fact, in usury-free banking system, the focus is the applicant's purpose. For each
contract, a special technique is devised, in a way that firstly, the clients and the bank
are not forced to pay or receive interest and secondly the profitability levels of the
contract are also considered. In the Islamic banking system, the banking transactions
have, therefore, been presented in the form of contracts.
28

29. BANKING ASSETS AND LIABILITIES

DEBT: The government's and banks' debts to the central bank dropped from
905,926 billion Rials (about 90 billion Dollars) in November 2008 to about
776,486 billion Rials (about 77 billion Dollars) in November 2009. According to
CBI reports, the value of its assets fell by 11.6 percent during the last 12 months
to 1,137,455 Rials in November 2009. Meanwhile, the total debt of 11 state-run
banks alone to the Central Bank of Iran has exceeded $32 billion in 2009,
showing a 10-fold increase over the past four years. Bank Melli Iran, with nearly
$9 billion, had the biggest debt followed by Bank Sepah, Iran's oldest, with about
$4.8 billion. Bank Maskan, Keshavarzi Bank, Bank of Industry and Mines and the
Export Development Bank of Iran were next with the respective debts of $4.7,
$4.1, $3.5 and $1.1 billion. Private-sector banks had much lower debts. Bank
Parsian, the largest private-run bank, owed about $421 million to the Central
Bank. In addition, the collective debt of state-sector companies to the Central
Bank has reached $25 billion (2009).
29

30. 
OVERDUE LOANS: According to unofficial figures, overdue loans have reached
IR175,000bn ($17.8bn, €13.6bn, £11bn), an increase of 75 per cent over three
years (November 2008. Plan to inject about $13 billion to recapitalize the banking
sector (2008). Ninety individuals have managed to secure collective facilities
totaling $8 billion from Iranian banks, with previous $27 billion unpaid loans
(2009). In October 2009, Iran's General Inspection Office informed that Iranian
banks have some USD 38 billion of delinquent loans, while they are only
capitalized at USD 20 billion. Current average for late debts of Iran's state banks
is over 15 percent while the global standard is 3 to 5 percent.
SHETAB BANKING SYSTEM
The Shetab (Interbank Information Transfer Network) system is an electronic banking
clearance and automated payments system used in Iran. The system was introduced in
2002 with the intention of creating a uniform backbone for the Iranian banking system to
handle ATM, POS and other card-based transactions.
Prior to its introduction, some Iranian banks were issuing cards that only worked on the
issuing banks ATMs and POS machines. Since the introduction of Shetab, all banks
must adhere to its standards and be able to connect to it. Furthermore, all issued credit
or debit cards must be Shetab capable. As of the end of 2003, the Shetab system had
2,926 ATMs and 16,070 POS units connected to it.
30

31. CHANLLENGES FACED BY BANKS OF IRAN

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. 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. 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, and other
groups, via the Quds Force, a branch of the Iranian Revolutionary Guard.

Critics believe that the Iranian Interest-Free banking law has simply created the
context for legitimizing usury or riba. In reality all banks are charging their
borrowers a fixed pre-set amount at a rate of interest that is approved by the
Central Bank at least once a year. No goods or services are exchanged as part
of these contracts and banks rarely assume any Commercial Risk.

At the beginning of 2012, the US and the EU imposed sanctions on Iran’s oil and
financial sectors with the goal of preventing other countries from purchasing
Iranian oil and conducting transactions with the Central Bank of Iran. The
sanctions
entered
into
force
last
summer.

Britain’s Supreme Court has overturned a ruling against Iran's Bank Mellat over
its alleged links to Tehran's nuclear energy program. On Wednesday, the highest
British court ruled that the UK government was wrong to have imposed sanctions
on the Iranian bank in 2009, and that the Treasury directive was ―irrational‖ and
―disproportionate.‖ The decision comes after the European Union General Court
decided in January to quash sanctions imposed against Bank Mellat in July 2010.

One of Japan’s biggest banks has frozen assets belonging to the Iranian central
bank after an order from a US district court which is pursuing Tehran for $2.6bn
in compensation awarded to victims of a 1983 bomb attack on US marines in
Lebanon. Bank of Tokyo Mitsubishi UFJ moved after receiving the order this
month but submitted an objection to the New York court on the grounds that it
does not have jurisdiction over assets held in Japan.The legal action also targets
the assets of other Iranian entities with accounts held by BTMU.
31

32. 
Iran's external debts decreased by $10 billion in the past Iranian calendar year,
which ended on March 20, IRNA quoted Iran's Central Bank Governor Mahmoud
Bahmani as saying on Sunday. The external debts stood at $7.2 billion compared
with $17.3 billion in the year which ended in March 2012, he added.

The banking system’s credit to
GDP ratio, a standard indicator of
the depth of bank intermediation,
is the second highest among
seven comparator emerging
market countries considered in
this study. Iran’s density of
companies listed on the local
stock exchanges is the highest
among comparators. However,
while
the
government’s
privatization program has helped boost market capitalization, trading remains
subdued due to the still limited free-float and the absence of mutual funds until
2009.

The depth of banking increased by 50 percentage points for the ratio of credit to
GDP, and by 60 percentage
points for the credit to non-oil
GDP ratio between 2001 and
2010. This growth occurred
largely between 2001 and 2005,
when
private
banks
were
licensed for the first time since
1979. The expansion of private
banks coincided with relatively
attractive bank intermediation
spreads (the difference between
lending and deposit rates).
Intermediation spreads narrowed in the second half of the decade through
greater competition, followed by government attempts to boost bank lending
against the background of the increasing isolation of Iran’s economy and
dwindling access to foreign sources of capital. The narrower spreads of 2006-10
led to a pause in banking sector expansion.
32

33.  IRANIAN FINANCIAL INSTITUTIONS are barred from directly accessing the
U.S. financial system, but they are permitted to do so indirectly through banks in
other countries. In September 2006, the U.S. government imposed sanctions on
Bank Saderat Iran, barring it from dealing with U.S. financial institutions, even
indirectly. The move was announced by Stuart Levey, the undersecretary for
treasury, who accused the major state-owned bank in Iran of transferring funds
for certain groups, including Hezbollah. Levey said that since 2001 a Hezbollahcontrolled organization had received 50 million U.S. dollars directly from Iran
through Bank Saderat. He said the U.S. government will also persuade European
banks and financial institutions not to deal with Iran. As of November 2007, the
following Iranian banks were prohibited from transferring money to or from United
States banks:





Bank Sepah
Bank Saderat Iran
Bank Melli Iran
Bank Kargoshaee (aka Kargosa’i Bank)
Arian Bank (aka Aryan Bank)
In other words, these banks were placed on the Office of Foreign Assets Control
(OFAC) Specially Designated Nationals List (SDN List). The SDN List is a directory of
entities and individuals who have been prohibited from accessing the U.S. financial
system. Although difficult there are ways to carry out an OFAC SDN List removal.
As of early 2008, the targeted banks, such as Bank Mellat, had been able to replace
banking relationships with a few large sanction-compliant banks with relationships with
a larger number of smaller non-compliant banks. The total assets frozen in Britain under
the EU (European Union) and UN sanctions against Iran are approximately 976,110,000
pounds ($1.64 billion). In 2008, the US Treasury ordered Citigroup Inc. to freeze over $2
billion held for Iran in Citigroup accounts.
33

34. CORPORATE GOVERNANCE IN IRAN
To ensure sustainable human development, actions must be taken to work towards this
ideal. Major donors and international financial institutions, like the IMF or World Bank, is
increasingly basing their aid and loans on the condition those reforms ensuring good
governance are undertaken.
The most important above factor is accountability that is a concept in ethics with
several meanings. It is often used synonymously with such concepts as answerability,
responsibility, blameworthiness, liability and other terms associated with the expectation
of account-giving. As an aspect of governance, it has been central to discussions
related to problems in both the public and private (corporation) worlds.
In politics, and particularly in representative democracies, accountability is an important
factor in securing good governance and, thus, the legitimacy of public power.
Accountability differs from transparency in that it only enables negative feedback after a
decision or action, while transparency also enables negative feedback before or during
a decision or action. Accountability constrains the extent to which elected
representatives and other office-holders can willfully deviate from their theoretical
responsibilities, thus reducing corruption. The relationship of the concept of
accountability to related concepts like the rule of law or democracy, however, still awaits
further elucidation.
Social responsibility is a doctrine that claims that an entity whether it is state,
government, corporation, organization or individual has a responsibility to society. This
responsibility can be "negative," in that it is a responsibility to refrain from acting, or it
can be "positive," meaning a responsibility to act. Corporate social responsibility (CSR)
is an expression used to describe what some see as a company’s obligation to be
sensitive to the needs of all of the stakeholders in its business operations. In my view,
there are many misconceptions surrounding the subject. For example, I feel it is
dangerous to conclude, as some have, that Iranian firms have lost their edge, that
inadequate corporate governance is the villain, and that the large pension funds have a
magic key to success. Certainly there have been compensation excesses and
management failures, but overreaction to them entails its own dangers.
However Tehran Stock Exchange (TSE) has been published draft of CG Bylaw and
Admission& Inspection Manual of listed audit firm. So it is important that everyone,
business and government alike, consider all sides of this complex issue and learn
everything we can, before adopting radical change.
34

35. According to this draft all big listed Co. shall behave audit committee under
responsibility of one of non-executive managers. For the first time this draft have been
review some matters as follow:
• Partner Rotation-Transition Questions
• Audit Partner and Partner Rotation-Other Matters
• Non-audit Services
• Audit Committee Pre-approval
• Audit Committee Communications
• Fee Disclosures
• "Cooling Off" Period
A company’s stakeholders are all those who are influenced by, or can influence, a
company’s decisions and actions. These can include (but are not limited to): employees,
customers, suppliers, community organizations, subsidiaries and affiliates, joint venture
partners, local neighborhoods, investors, and shareholders (or a sole owner).
The relationship among the CEO, top management and the board of directors is a
complex and a fascinating subject, which has developed over many decades. As we
know from reading the papers, it continues to evolve. That's due at least partially to the
growing presence of big institutional investors.
Also, individual investors' greater awareness of issues and events has increased public
scrutiny of management on both financial and societal issues. Boards of directors today
are much more actively involved in company matters than they used to be. Generally, I
think increased board involvement is a positive development in company management.
If a board nominee is not prepared to be an active, inquiring, participating director, he or
she should decline the offer to serve. But board members, who attempt to
micromanage, assume management's authority or exercise authority without attendant
responsibility can be a negative factor. Demands on the chief executive have
multiplied. A broad spectrum of societal issues has become an important matter of
everyday business concern (the environment, diversity of workforce, etc.) At the same
time, competition has intensified and become global, increasing pressure on
management for financial results, raising the stakes on decisions, and narrowing the
tolerance for mistakes.
These trends mean the CEO needs all the wise counsel he or she can get. A board of
directors composed of able individuals with diverse backgrounds and experience, can
be a valuable ally to the CEO. This was certainly the case during Texaco's crisis period.
35

36. INFO I WANT TO SHARE
 Iran’s new president, Hassan Rohani, has been hailed
abroad as a reformist breath of fresh air. But at home
he may still have to accommodate the crusty old guard
Jun 22nd 2013 | TEHRAN
THE first-round victory on June 14th of
Hassan Rohani, with almost 51% of the
vote in a field of six candidates,
stunned both Iranians and the world at
large. In the run-up to the contest, the
most conservative of the candidates,
Saeed Jalili, was widely tipped as the
favourite. The supreme leader,
Ayatollah Ali Khamenei, who has the
final say in all crucial matters of state,
would—it was surmised—look on with
approval, perhaps with vote-rigging officials poised to enforce the desired result, as they
did last time round, in 2009, when the country was thrown into a year-and-a-half of
turmoil.
Mr Rohani, a 64-year-old cleric, campaigned on a platform of engagement with the
West (including on nuclear issues) and an easing of restrictions at home. Though he
has served at the heart of the establishment for many years, he was plainly the most
liberal of the eventual runners, though all of them had been vetted by the Council of
Guardians, a clutch of clerics and lawyers, to ensure their fidelity to the tenets of the
Islamic revolution of 1979. It helped Mr Rohani that the so-called ―principlist‖ bloc of the
four most conservative candidates, led by Mr Jalili, failed to rally around one man.It is
also generally assumed that he will back Syria’s embattled president, Bashar Assad, to
the hilt, as his predecessor and the ruling establishment have done. Much store will
continue to be set on strengthening the Shia axis that now stretches from southern
Lebanon, where Hizbullah, a Shia party-cum-militia, reigns supreme, through Syria
under its Alawite rulers, and across to Iran from Iraq, under the thumb of an increasingly
s e c t a r i a n
S h i a
l e a d e r .
36

37.  Iranian tycoon claims EU sanctions are unfair
By Fardad Fahrazad BBC Persian
Meeting in a car park in Dushanbe: Babak Zanjani
gives a rare interview to BBC Persian Iranian
billionaire businessman Babak Zanjani has amassed
the kind of fortune that could qualify him for a place
on Forbes rich list. Instead he is on an EU sanctions
list, accused of facilitating illicit oil deals for the
Islamic Republic.
The EU said he was helping Iran to get round international sanctions by selling oil
abroad and channelling the profits back via his Malaysia-based First Islamic Bank.Mr
Zanjani is adamant that he has been wrongly accused.
"I didn't buy Iranian crude oil. I was buying low quality fuel oil to sell to Malaysia," he
said.
"The US and the EU have exempted several countries from the sanctions on Iran,
Malaysia is one of them."
China floods Iran with cheap consumer
goods in exchange for oil
With
the
Islamic
republic
increasingly cut off from global
markets due to sanctions, Beijing
is in a Rush-hour traffic in Tehran.
China is angling for a large slice of the
consumer market in Iran, including cars.
A stone's throw from the former grounds of
the British embassy, left vacant after a
hostile
takeover
by
anti-western
demonstrators in late 2011, the new
headquarters of the Geely brand is the
second Chinese automobile manufacturer in
Iran. Another company, Chery Motors, has
been active here for five years, and produces several of its low -range vehicles on
Iranian assembly lines.
37

38. Small business owners are not the only ones losing out. In a country where the state
plays a significant role as an employer, the outsourcing of major infrastructure projects
to Chinese businesses takes construction and engineering jobs away from the already
struggling local labour pool. Over the past two decades of fortifying bilateral ties,
Chinese engineers have spearheaded countless infrastructural projects, most
prominently the Tehran metro system – a trend both Iranian and Chinese officials have
been keen to encourage.
"The new agreement seems to be, no more consumer goods. If we're going to barter,
build us motorways, bridges and dams," said the Sino-Iranian trade analyst.
As Iran's inflation and unemployment levels climb, the growing visibility of Chinese
workers at public construction sites is thus likely to further foment public resentment.
Presently, the massive expansion of Tehran's Sadr expressway – touted as a preelection achievement of the mayor, Mohammad Qalibaf – may give enough cause for
local ire. Easily the most visible infrastructural endeavour in Tehran, the two-level, fourmile project is sponsored by China.
Close your mouth like a diver in the sea
Only under water can fish remain free.
38

39. REFRENCES
1. http://www.zawya.com/researchmonitor
2. http://data.worldbank.org/country/iran-islamic
3. Capital for the Future Author: The World Bank
4. Global Monitoring Report 2013 Authors: World Bank; International Monetary Fund
5. World Development Indicators 2013 Author: World Bank
6. Building Better Policies The Nuts and Bolts of Monitoring and Evaluation Systems
Gladys Lopez-Acevedo, Philipp Krause, and Keith Mackay,
7. "Commercial Government Owned Banks". Central Bank of the Islamic Republic of
Iran. Archived from the original on 9 February 2010. Retrieved 2010-01-31.
8. "Iran opens bank to support cooperatives". PRESSTV. Retrieved 2009-08-06.
9. financial Services Forecast", Economist Intelligence Unit, August 18, 2008
10. "Iran to launch investment banks". Payvand.com. 2006-11-22. Retrieved 2010-02-15.
11. Iran Banking and Financial Market Handbook, ISBN 1-4387-2384-9, International
Business Publications, USA (March 20, 2010)
12. Iran Investment Monthly SUMMARY OF THE ASSETS AND LIABILITIES OF
PUBLIC AND PRIVATE BANKS IN IRAN - Annual report by the Central Bank of
Iran (includes official statistics about the OTC bond market in Iran)
13. Laws and regulations relating to the Iranian Banking sector Bank Supervision Central Bank of Iran.
14. Islamic Republic of Iran: IMF Staff Report – Statistics on the banking sector and
macro-economic projections by the International Monetary Fund (March 2010)
15. Economist Intelligence Unit: Financial Services Report - Iran (March 2010)
16. BMI: Iran Commercial Banking Report (56-page report, 2009)
17. BMI: Iran Insurance Report (72-page report, 2012).
18. Tehran Stock Exchange: FACT BOOK. Retrieved July 31, 2010.
19. The History of Iran by Elton L. Daniel 2nd Ed.
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40. 20. Iran: the Looming Crisis: Can the West live with Iran's nuclear threat? By Dr
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