An Iranian banker has said that there are few signs of normal banking relationships resuming between the world's largest banks and Iran.

Sanctions imposed unilaterally on Iran by Washington are the major problem, and until those are lifted it is unlikely that major financial institutions will write letter of credit (L/C) business with the Islamic Republic any time soon.

Persistent reluctance

"For the moment, the little European banks have agreed to work with us," head of the private Middle East Bank in Tehran, Parviz Aghili, told local media.

Italian, Austrian, Swiss, German and Belgian banks are however doing business with Iran he added, without naming the financial institutions.

"But not a single medium-sized or big bank has so far agreed to do it," he added.

Relations restored

Other reports suggest that banks writing business with Iran include Belgium's KBC, ING of the Netherlands, Austria's Raiffeisen Bank and Erste Bank, Italy's Mediobanca and Banco Popolare as well as Germany's EIH, KfW and AKA banks.

They are reportedly writing L/C business but for relatively small sums of between US$10-50 million.

The main obstacle preventing closer banking ties are unilateral sanctions imposed by Washington on Iran that preclude US banks from doing business with the Islamic Republic and require a large amount of due diligence work for non-US banks to make sure they do not fall foul of US regulations.

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