Corruption, mismanagement in spotlight as Iran dissolves major private bank

Tehran, Iran – Authorities person merged 1 of Iran’s largest backstage lenders into the country’s biggest state-run slope successful a determination that highlights a profoundly troubled system and volition further compression mean citizens arsenic pressure from the West grows.

The cardinal slope connected Thursday announced that Ayandeh Bank, privately owned by 1 of Iran’s wealthiest families, would beryllium dissolved and merged with Bank Melli, the government-run nationalist bank, and that Ayandeh branches crossed the state would beryllium transformed into Bank Melli branches by Sunday.

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Customers were told their accounts and deposits are safe, and each contracts stay nether the aforesaid conditions. But aft years of murky operations and cardinal slope interventions, Ayandeh had racked up losses connected a standard that impacted Iran’s macroeconomics, truthful its bailout volition not permission Iranians unscathed.

How did we get here?

Ayandeh began amid a situation successful the 2010s caused by corruption and deficiency of regulatory supervision implicit the ailing banking system, experts told Al Jazeera, astatine a clip erstwhile Iran was reeling from United Nations sanctions implicit its nuclear programme.

That was erstwhile hundreds of unlicensed fiscal institutions linked with parastatal, military, oregon spiritual foundations mushroomed crossed the country.

They offered exorbitant involvement rates to pull currency distant from the banks, and did not repay the deposits successful galore instances, leaving thousands of investors incapable to retreat their deposits for years.

The authorities and the cardinal slope yet took implicit and completed the process of outlawing the unlicensed institutions by 2017, a twelvemonth aft they managed to instrumentality power of implicit 25 percent of the country’s full wealth supply.

The institutions had small successful their coffers aft being taken implicit owed to loans to insiders and wealth sunk into property.

Much of the skyrocketing indebtedness accrued by the institutions had to beryllium recuperated by printing money, which meant rising ostentation and accrued costs of living for mean Iranians.

Ayandeh was established successful 2013 via the merger of Tat Bank with 2 state-linked fiscal entities, the Salehin Credit Institution and Aatee Credit Institution.

Ali Ansari, the 63-year-old concern tycoon whose household is believed to beryllium among the wealthiest successful Iran, was the laminitis of some Ayandeh and Tat, and owned a bulk of the shares successful some fiscal institutions on with household members and adjacent associates.

Ansari has been down gigantic existent property projects, owns ventures successful steel, telecommunications and hospitality, and sat connected the committee of Tehran’s Esteghlal shot club, among different concern and influence-growing activities.

Just however large are the numbers?

The slope has been the taxable of authorities attraction for years.

An Iranian pistillate walks past a slope subdivision with signage connected its facade speechmaking successful Farsi: ‘This erstwhile Ayandeh Bank subdivision is present portion of Melli Bank’, successful the superior Tehran connected October 25, 2025 [Atta Kenare/AFP]

Two years ago, arsenic Ayandeh racked up losses and much wealth had to beryllium printed, the cardinal slope revoked shareholder voting rights connected much than 60 percent of the company’s banal and gave it to the Ministry of Economic Affairs and Finance.

But that did not help, and the slope kept borrowing from the cardinal slope and the authorities to enactment afloat.

By the clip of Ayandeh’s forced dissolution past week, the cardinal slope said the lender had an eyewatering 5 quadrillion rials ($4.67bn utilizing the existent unfastened marketplace speech rate) successful debt, and held 2.5 quadrillion rials ($2.34bn) successful people’s deposits.

Ayandeh was legally allowed to dole retired up to 200 trillion rials ($187m) successful loans based connected its proven capital, but the cardinal slope said the lender paid astir 10 times that magnitude to individuals and entities implicit the years.

Up to 1.3 quadrillion rials ($1.21bn) was fixed to a tiny fig of individuals and firms straight linked with Ayandeh and its interior projects, according to the cardinal bank. Authorities person refused to uncover the identities of the radical and entities who took the money.

Iranians online person besides been wide reacting to quality of Ayandeh’s bankruptcy. Private assemblage businessman Pedram Soltani was among those who called for accountability.

لیست وامها و تسهیلات معوق و مشکوک‌الوصول و داراییهای سمی #بانک_آینده را منتشر کنید!
مردم باید بدانند هزینه چه کسانی بر جیبشان تحمیل شده است.

— Pedram Soltani (@PedramSoltani1) October 24, 2025

Translation: Publish the database of overdue and doubtful-to-return loans and toxic assets of Ayandeh Bank!  People indispensable cognize whose costs person been imposed connected their pockets.

Most of the loans paid by Ayandeh person been overdue for a twelvemonth oregon longer and are considered improbable to beryllium recovered.

Bijan Khajehpour, an economist and a managing spouse astatine Eurasian Nexus Partners consulting firm, pointed retired that each Iranian banks person a ample measurement of non-performing loans (NPL) successful their books.

“These NPLs are a effect of loans having been extended to customers without the owed process of assessing their collateral based connected corrupt transactions betwixt networks of power,” helium told Al Jazeera.

“It says a batch astir the grade of corruption and however governmental patronage undermines concern activities.”

Ayandeh was singlehandedly liable for an unthinkable 42 percent of each overdrafts made by banks from the cardinal bank, and 41 percent of each superior imbalance successful the beleaguered Iranian banking sector, according to the cardinal bank.

It had a superior adequacy ratio (CAR) of minus 600 percent, whereas a slope indispensable person a bare minimum ratio of 8 percent nether Basel II planetary standards that are besides accepted by Iran.

Its elimination raises the mean CAR of Iran’s banking manufacture from 1.36 percent to astir 5 percent.

Ayandeh is not an isolated case; it simply underscores the systemic woes of Iran’s globally isolated fiscal sector.

At slightest 5 different banks, including state-run Bank Sepah, which successful 2020 had 5 different sinking banks merged into it successful the largest banking consolidation successful Iran’s history, are flagged by the cardinal slope arsenic being highly imbalanced.

Corruption, governmental infighting

The announcement connected Ayandeh’s dissolution came 1 time aft Iran’s judiciary chief, ultraconservative cleric Gholamhossein Mohseni-Ejei, straight threatened Central Bank of Iran Governor Mohammad-Reza Farzin with ineligible action.

“Mr Farzin, you person capable ineligible mandate to marque immoderate determination astir Ayandeh Bank. Do your ineligible work oregon other we volition travel successful and summation costs for you,” helium wrote successful a station connected X.

Ejei said that contempt the cardinal bank’s engagement successful moving Ayandeh for 7 years – appointing and dismissing the committee of directors and the CEO – the bank’s accumulated losses accrued by up to tenfold successful that time.

No arrests oregon indictments, oregon immoderate different signifier of ineligible reproach, person been announced by the judiciary contempt the billions of dollars successful losses.

Along with the judiciary, hardline politicians with the Paydari Front – who person been entrenching powerfulness successful the parliament, the Islamic Revolutionary Guard Corps (IRGC), and authorities media – person consistently been the astir vocal critics of the backstage bank.

Iranians volition beryllium impacted by the Ayandeh bailout. Here, shoppers assemblage the Tajrish Bazaar successful Tehran connected October 25, 2025 [AFP]

In summation to scoring points for appearing to beryllium anti-corruption, the hardliners opposed the slope to discredit governmental and economical rivals successful the technocratic campy affiliated with reformists who are successful favour of liberalising the Iranian system and opening it up to the West.

Parliament talker and erstwhile IRGC commandant Mohammad Bagher Ghalibaf hailed Ayandeh’s dissolution arsenic “a large occurrence for the country’s decision-making and governance system” successful a connection connected Saturday.

How Iranians volition extremity up paying the price

Ayandeh’s downfall besides puts its assets, galore of them successful the existent property sector, nether afloat authorities control, but they volition beryllium hard and time-consuming to sell.

The cardinal slope has emphasised that somehow, each of the assets but “none of the imbalances” of Ayandeh volition beryllium transferred to Bank Melli and to compensate for immoderate of the losses, Ayandeh’s assets volition beryllium managed and sold, wherever possible, by Melli.

The crown jewel of the assets is Iran Mall, the largest promenade successful the satellite successful presumption of full constructed level area, located successful occidental Tehran.

The Deposit Guarantee Fund, which insures slope deposits up to a ceiling nether the cardinal bank’s auspices, volition person to ft a fraction of the measure arsenic well.

The cardinal slope says Ayandeh’s apical shareholders volition person to relationship for immoderate of the money, but it remains unclear however much, by what clip and precisely successful what signifier they volition person to pay.

However, owed to the ample measurement of accumulated losses, Iranian media estimation that successful an optimistic scenario, the authorities and Bank Melli volition person to relationship for astir two-thirds of the debt.

Part of that volition person to beryllium done done printing much money, which itself has agelong been identified arsenic a main operator of ostentation successful Iran, presently at implicit 40 percent amid reinstated UN sanctions and consistently among the highest successful the satellite implicit decades.

In elemental terms, tens of millions of Iranians volition wage the terms implicit the coming months and years successful the signifier of decreased purchasing power.

Household items person already seen different large terms leap successful the aftermath of the 12-day warfare with Israel and the US successful June, with nutrient items similar chicken, reddish meat, eggs and peas experiencing the sharpest increases.

For his part, Ayandeh’s Ansari said successful a connection connected Friday that the bankruptcy came “as a effect of decisions and policies that were made extracurricular the bank’s control”, adding that the slope has near down “valuable legacies and lasting assets”.

Ansari added “my conscience is astatine easiness and my bosom is assured”, and said helium had devoted each his spot to work and to the nationalist good.