In a rare and significant move, Iran has declared one of its largest private banks, Ayandeh Bank, bankrupt, and transferred all its assets to the state-owned Melli Bank, according to official reports. The decision comes as the country continues to face financial challenges and the pressure of renewed international sanctions.
What Happened
Ayandeh Bank, established in 2012, had built a large presence with 270 branches across Iran, including 150 in the capital, Tehran. However, over the years, the bank’s financial health worsened due to rising debts and poor management.
According to Iran’s ISNA news agency, Ayandeh Bank had accumulated losses worth about $5.2 billion and debts of nearly $2.9 billion. On Saturday, long queues of customers were seen outside several branches in Tehran, as police were deployed to maintain order.
The Central Bank of Iran announced that Melli Bank has now absorbed all the assets of Ayandeh Bank. It also assured depositors that their savings are safe and fully recoverable.
“The transfer from Ayandeh Bank to Melli Bank is now complete,” said Abolfazl Najarzadeh, Managing Director of Melli Bank, on state television.
Iran’s Economy Minister, Ali Madanizadeh, also assured customers that they have “nothing to worry about.”
Why the Bank Failed
Officials said Ayandeh Bank’s collapse was mainly caused by bad loans and poor financial discipline. Hamidreza Ghaniabadi, an official at the Central Bank, told the IRNA news agency that over 90% of Ayandeh Bank’s funds were lent to people or companies connected to the bank itself — and most of those loans were never repaid.
Ayandeh Bank had also invested heavily in lavish projects, such as the massive Iran Mall shopping complex in Tehran, which features luxury facilities including an ice rink and cinemas. These high-cost ventures added to the financial strain and eventually led to bankruptcy.
Other Banks in Trouble
According to Iran’s Tasnim news agency, Ayandeh Bank is not the only one in crisis. Five other banks — Sarmayeh, Day, Sepah, Iran Zamin, and Melal — are also facing serious financial difficulties.
The Bigger Picture: Impact of Sanctions
Iran’s banking system has been under growing stress following the reimposition of UN sanctions in September. These sanctions came after diplomatic efforts to revive the nuclear deal failed.
The sanctions, known as a “snapback”, were originally lifted in 2015 when Iran agreed to limit its nuclear activities under an international agreement. However, the deal collapsed after former U.S. President Donald Trump withdrew from it in 2018, leading to renewed restrictions on Iran’s economy.
The combination of sanctions, mismanagement, and risky investments has now created a severe banking crisis, with Ayandeh Bank’s collapse being the most visible example yet.
