Banks are influential and challenging sectors of the economy. Their privatization will have a huge impact on other economic bodies and services.
Upon the order of the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei, the committee for privatization of banks was formed in March 2007. Overseen by the CBI Directorate for Banking Affairs, the committee comprised representatives from insurance companies, state-run firms, Privatization Organization, Tehran Stock Exchange and agent banks, including Mellat, Tejarat, Saderat and Refah-e Kargaran.
Privatization Committee
The committee assigned the task of managing financial affairs and ensuring transparency to Bank Tejarat, handling legal affairs to Bank Mellat and transferring privatization know-how to Bank Saderat.
Hamid Pour-Mohammadi, deputy minister for economic affairs and finance, announced that a package concerning privatization of banks has been compiled.
Subsequently, Bank Mellat was introduced as the first bank to be privatized.
The shares of Bank Mellat will soon be offered in the stock exchange, said the bank's managing director on Sunday.
Speaking to IRNA, Ali Divandari added that all measures to cede some of its shares have been taken and Bank Mellat is now on the threshold of privatization.
Meanwhile, a member of Bank Mellat's Board of Directors, Mohammad Reza Saroukhani, said developing electronic banking is one of the main objectives of the bank.
New Services
Describing the preparation of e-banking software as the most important achievement of the bank, he said it began electronic activities with Jaam Banking Account and presently 1,537,000 people can access services from 1,900 branches of the bank nationwide.
"Some 11,881,000 people have opened interest-free and short- and long-term accounts," he said.
The bank's managing director noted that 75,000 Point of Sale (POS) systems are operational.
Divandari told Iran Daily that Bank Mellat will be privatized in the not-too-distant future and become the largest private bank.
Energy Investment
Noting that oil industry is a significant and attractive field for investment, the official said energy investments will bring huge profits for banks in the long run.
"Bank Mellat has become more inclined toward the energy sector in recent years," he said, adding that Bank Mellat has made investments and financial assistance worth over $12 billion through finance mode and letters of credit.
He stressed that Bank Mellat is one of the most active banks in the energy sector.
With $28 billion in financial assets, Bank Mellat has 25,000 personnel and 2,000 domestic and foreign branches.
Divandari said the bank has 22 percent of the sector's share and is involved in 30 percent of foreign trade.
Thanks the undertaken measures, he said, Bank Mellat shares would be transferred to the private sector in near future.
The top banker said that once Bank Mellat joins the private banks, its role in energy sector would become more significant, enabling it to access a greater amount of financial resources.
According to him, the success in supplying the oil industry financially is tied to the banks' behaviors.
They should change their cautious attitudes, the official said. Concurrent with considering their benefits, they must behave logically concerning risks involving the oil industry, he underlined.
Also, a faculty member of Allameh Tabatabai University believes that the public deposits account for the majority of financial resources of state-run banks. Since, it is a meager fund, the banks should embark on some activities to become profitable bodies, Jamshid Pajooyan stressed.
On choosing Bank Mellat as the first state-run bank to be privatized, Jamshid Pajooyan said this bank had less assets compared to the other banks. If a bank is privatized, its management should also be tranferred to the private sector, he underlined.
The professor concluded that that the cooperation of Bank Mellat with oil industry would help economic boom in supplying the financial resources of giant projects through state-run banks.
By Marzieh Ghelichkhani
© Iran Daily 2008
