Iran, Oman Eye Joint Bank Card Switch

"Iran is ready to connect the bank card switches of the two countries and prepare the grounds for offering services to the tourists of both countries," Valiollah Seif, governor of the central regulatory entity, was quoted as saying by CBI's official website. 

Sultan bin Salem Al Habsi, deputy chairman of the Board of Governors of the Central Bank of Oman, said during the meeting that paying attention to payment and settlements system in expanding banking relations is of utmost importance.

"A technical and expert team is currently evaluating the mechanisms of connecting the bank card switches of the two countries and we hope that its implementation will create a new atmosphere in this field," Financial Tribune quoted him as saying.

"The Central Bank of Oman welcomes bilateral cooperation with Iran and supports Oman's commercial banks in this regard."

CBI had recently announced that "preliminary efforts have been made to link up with the bank card system of Oman" in one of its latest performance reports.

Almost a year ago, the central banks of Iran and Oman had signed an agreement in Tehran to pave the way for expansion of banking ties in a meeting attended by the representatives of both countries' commercial banks and foreign ministries.

In the meeting, Seif referred to the emphasis of top-tier officials on developing bilateral economic ties, for which banking relations must be given high priority. 

"However, we must not strictly focus on direct economic ties between our two nations, as we can play a more active role in the markets of Central Asia and the Persian Gulf considering the capacities of the region," he said.

Seif, who also heads the financial decision-making body Money and Credit Council, welcomed a recent move by Oman for accepting guarantees for Iranian investors issued by Iranian banks and expressed hope that it will be a sign of new openings in banking ties.

"CBI has facilitated banking regulations with the aim of preparing the grounds for the entry of foreign investments and we hope that the Central Bank of Oman will help us in this path," he said.

Last week, Mohsen Zarrabi, the head of Iran-Oman Chamber of Commerce announced that CBI has allowed Iranian lenders to issue guarantees for Iranian businesses planning to invest in Oman or those who seek to take out loans from Omani banks. 

Zarrabi also said CBI has required banks to support those who want to launch factories in Oman and reexport Iranian goods to target markets, along with the exporters of engineering and technical services who wish to receive loans from Omani lenders and sign build–operate–transfer or build–own–operate contracts.

Seif proposed that a joint banking committee be formed between the two countries to identify hurdles on the way of improving ties. He further welcomed both countries trying to expand their offshore branches and said CBI is fully open to allowing Omani banks on its soil.

"Iran's commercial banks are eager to operate in Oman to offer services to business players and tourists, and we believe this to be influential in deepening and developing ties," he said.

"Oman's Muscat Bank has a representative office in Tehran and CBI welcomes its potential transformation into a full branch."

Reaching a currency swap agreement was one of the other initiatives proposed by Seif.

Oman's Foreign Minister Yusuf bin Alawi bin Abdullah welcomed the expansion of economic and banking ties, and referred to the formation of a joint banking committee as a good idea, but said representatives of the central banks of both countries must be among the members.

"Devising operational and practical plans, including mechanisms for creating joint accounts and using national currencies of the two countries without being dependent on foreign currencies, must be viewed as one of the main requirements," he said.

The deputy chairman of the Central Bank of Oman advocated expansion of investment cooperation between Iran and Oman, and said he expects the central banks of both nations to ease regulations for increasing investments.

Habsi called for holding regular banking committee meetings to strike more agreements and find better and more practical solutions to banking problems related to Iran and Oman.