Iran’s Ayandeh Bank collapses amid crisis
Iran shut down Ayandeh Bank on Saturday after the private lender had accumulated losses of $5.2 billion and debts totaling $2.9 billion. State-owned Melli Bank absorbed the failed institution, which operated 270 branches before its collapse. Police maintained order as depositors lined up outside closed branches in Tehran.
Central Bank officials blamed poor lending practices for the failure. More than 90 percent of funds went to related parties or unsuccessful projects managed by the bank itself. The Iran Mall shopping complex represented one of several ventures that failed to produce returns.
The collapse exposes weakness across Iran’s financial sector as renewed United Nations sanctions squeeze the economy. Inflation surpasses 40 percent while the national currency loses value against the dollar. Several other banks face serious cash shortages.
Sanctions returned in September after diplomatic efforts to restore the 2015 nuclear deal stalled. Israeli and American attacks on Iranian nuclear facilities in June preceded the reimposed restrictions. Experts warn that additional bank failures may follow without stronger financial controls and foreign capital, which remains improbable given current tensions.
