Iran's Bank of Industry and Mines (BIM) considerably expanded its correspondent banking network in the last fiscal year to bolster its letter of credit (L/C) business according to the bank’s deputy for international affairs.

Abbas Daneshvar says the bank is also now writing L/C business in several currencies with Asian and European entities.

Correspondent network

The bank official says BIM set up correspondent relations with 82 banks from 33 countries in the year to 20 March 2017.

According to Daneshvar, BIM was the first bank to open L/Cs and one of the most energetic developers of a correspondent banking network since international - but not US - sanctions were lifted in early 2016 when the Islamic Republic scaled back its nuclear ambitions.

L/C growth

In the last Iranian fiscal year he said BIM opened more than US$1.2 billion worth of L/Cs in deals with parties in China, India, Japan, South Korea, Germany, Spain, Belgium and Italy.

Daneshvar says 78 per cent of L/Cs opened were euro-denominated while other L/Cs used Indian rupee and Chinese yuan, which respectively accounted for 10 and 7 per cent of L/C values. The remaining L/Cs were opened in Turkish lira and Japanese yen.

Major recent financings include the electrification of railways between Tehran and Mashhad with Chinese counterparties as well as several industrial and infrastructure projects with South Korean and Indian counterparties.

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