Turkey Revokes Operating License of Iran's Bank Mellat Istanbul Branch

Turkey's Banking Regulation and Supervision Agency (BDDK) has decided to revoke the operating license of Iran's Bank Mellat branch in Istanbul. This decision was published in the Official Gazette, making it effective. Bank Mellat has faced years of Western sanctions due to alleged ties to Iran's nuclear program.

Highlights

• The BDDK announced the revocation of Bank Mellat's Istanbul branch operating license.
• The decision was based on a clause in banking law regarding risks to depositors' rights or financial system stability.
• Bank Mellat has previously been subject to Western sanctions over allegations related to Iran's nuclear program.
• The US reimposed sanctions on Iran in 2018 after unilaterally withdrawing from the nuclear deal.
• In 2019, Bank Mellat faced further US and Gulf sanctions for alleged links to Iran's Islamic Revolutionary Guard Corps (IRGC).

Details

The BDDK's decision is based on a specific clause within Turkey's banking law. This clause allows for the revocation of a bank's license if its continued operation is deemed to pose a risk to depositors' rights or the security and stability of the financial system. The Turkish notice did not specifically cite US measures or detail operational issues related to Bank Mellat.

Bank Mellat has been a target of Western sanctions for years over accusations that Tehran was pursuing a nuclear weapon program. These sanctions were lifted as part of the landmark 2015 nuclear deal between Iran and world powers. However, the United States unilaterally withdrew from this agreement in May 2018, subsequently reimposing economic sanctions on Iran. In 2019, Bank Mellat was hit by additional US and Gulf sanctions after being identified as one of 25 entities linked to Iran's Islamic Revolutionary Guard Corps (IRGC).

Why it matters

This development underscores Turkey's commitment to the security and stability of its financial system. It also highlights the ongoing impact of international sanctions on Iran and their implications for the global financial system. The decision has the potential to further restrict the international access of the Iranian banking sector.