By John Lee.
Reuters reports that Dubai’s largest lender, Emirates NBD (ENDB), is just one of the many banks that are already meeting prospective clients and taking legal advice about entering Iran.
According to the report, non-U.S. banks may trade with Iran without fear of punishment in the United States, but U.S. banks may not, directly or indirectly.
European banks are said to be more cautious, with Deutsche Bank remembering past fines for breaking sanctions and staying away “for the moment“, but Commerzbank said it was reviewing its policy of not doing business in Iran.
Stuart Jones Jr., an executive director at EY, told the news agency that regional banks will test the water and other foreign banks will watch to see what happen.
Qatar National Bank (QNB) has a representative office in Tehran, but its status is unclear.
State Bank of India also has an Iran representative office, according to its website, although calls to the branch were unanswered, Reuters said.
Standard Chartered, fined $667 million in 2012 for breaking U.S. sanctions, said it would not undertake any new transactions involving Iran.
The Dubai office of consultancy Promontory Financial Group, which advised several global banks on sanctions compliance, has received a flood of enquiries from lenders since Sunday including from the Gulf, Lebanon and Turkey.
Iranian banks are far behind their western rivals, as they still use Basel I rules for risk-management and capital requirements, while US and European lenders are shifting to the third generation of these standards.
The Financial Times quotes a Tehran banker as saying, “in the beginning, second- and third-tier European banks will work with us“.
(Source: Reuters, Financial Times)