Iran’s banking sector in urgent need of reform.
Tehran's banks face major corruption scandals, and a complex policy environment. In July 2016, the Central Bank of Iran (CBI) announced major plans to reform the country’s banking system in line with global standards. Iranian banks have been cut off from the international financial system since 2012, owing to sanctions. After the 2015 nuclear deal, Iran expected that the lifting of sanctions would reverse this situation. However, despite interest among Central Asian and Turkish banks, progress has been limited.
European banks will be slow to engage with Iran, fearing unpredictable US penalties.
Differing US and Iranian interpretations of sanctions lifting under the nuclear deal may come up before the dispute resolution mechanism.
Macroeconomic strains will put depreciatory pressure on the currency.
If President Hassan Rouhani fails to win re-election in May, the chances of banking reform would be much lower.
