Banking Ties With Qatar Still Facing Hurdles

EghtesadOnline: In spite of all efforts to boost economic ties with Qatar, Iran’s only active bank in the Arab nation, Bank Saderat, is still facing serious hurdles, according to its chief executive.

News ID: ۷۸۲۸۸۹

11 June 2018

“We have made efforts to expand the two country’s relations in the banking sector, but working conditions between Qatari banks and Bank Saderat are not like the bank’s working conditions with Omani banks,” Hojjatollah Seyyedi also told IBENA.

At present, two Bank Saderat branches in Qatar are tasked with servicing the transactions of Iranian businessmen and exporters. Alongside Oman, Qatar has emerged as Iran’s main replacement for the UAE.

Bank Saderat’s CEO said his bank’s branches in Muscat or even in the UAE still offer better services to Iranian customers than branches in Qatar. He referred to the fact that the banking system in Qatar is completely separate from the political apparatus as a major reason, Financial Tribune reported.

“In spite of our negotiations with Qatari counterparts, we have yet to expand our operations considerably,” he added.

Seyyedi conceded that Bank Saderat’s branches in Qatar are under a lot of pressure because many Iranians turn to them for services and are often dissatisfied.

The CEO noted that Iranian exports to Qatar, especially exports of food and cement, are on the rise.

As Qatar’s air passageways are blocked by its Arab neighbors, led by Saudi Arabia, and Iran has been allowing Qatari aircraft to pass through its airspace, receiving passage fees has also boosted banking operations.

“However, we have yet to offer all the services expected from Bank Saderat in Qatar,” Seyyedi said.

Recently, Mohammad Lahouti, the head of Iran’s Exports Confederation, had pointed out that banking channels with Qatar are less than suitable and this has created many problems for Iran’s private sector traders and exporters.

On Jan. 27, the Central Bank of Iran made the first purchase of Qatar’s riyal from exporters of goods and services to the Persian Gulf emirate. All other Iranian banks have been permitted to purchase riyals as well. One day after the CBI move, Bank Saderat changed its base purchase price to the price announced by the central regulator.

Another recent development that is expected to facilitate trade with Qatar and accelerate the process of developing banking ties is the establishment of Iran-Qatar Chamber of Commerce in February. The joint chamber is set to help facilitate Iranian firms’ presence and minimize their detrimental rivalry in the Qatari market.

The lack of a single body for holding economic negotiations with the Persian Gulf state has disrupted mutual business engagements between Iranian and Qatari traders.