CBI says Russian bank branch openings central to monetary pacts
Iran and Russia are continuing to advance monetary agreements aimed at enabling financial transactions in their national currencies, with one of the most important steps being the establishment of branches of Russian banks in Iran, a senior Iranian central bank official said.
Speaking to ILNA, Abolfazl Koudei, deputy for international affairs at the Central Bank of Iran (CBI), said the two countries are pursuing monetary agreements so they can conduct financial exchanges using their national currencies.
"These measures are underway, and the most important of them is the establishment of branches of Russian banks in Iran," he said.
Koudei said one of the most tangible areas of cooperation between the two countries is the SHETAB Mir payment system, whose first and second phases have already been completed, while the third phase will be implemented soon.
The monetary agreement between Iran and Russia became operational in January 2025, and the national currencies of the two countries — the ruble and the rial — have been used as the basis for settlement at the agreed exchange rate in the commercial foreign exchange market.
Russia's Mir Card Network that was connected to Iran's SHETAB banking network in November 2024, allows Iranian bank cards to be used in Russian banks.
"In this phase, Iranian individuals can use their Iranian bank cards at point-of-sale terminals in Russian stores and make purchases," Koudei said.
Also, Russia's second-largest financial institution, VTB, opened a representative office in Iran in 2023 to facilitate foreign currency transfers. The development strengthened the growing economic partnership between the two countries as they seek to mitigate the impact of Western sanctions.
Iran and Russia have expanded their trade and energy ties since February 2022, when Russia came under Western sanctions because of its war in Ukraine.
The CBI official has also said the bank has maintained a continuous presence in international forums and institutions and recently played an active role at a meeting of member states of the Shanghai Cooperation Organization.
He said the Shanghai Development Bank is one of the organization's pillars and that the Central Bank of Iran has active cooperation with the institution.
"We advanced discussions on the framework for establishing the Shanghai Development Bank, and very good agreements were reached regarding its initial capital. The use of member countries' national currencies was also approved, which is an important step," he said.
He added that understandings had been reached on the bank's governance system and initial capital, and that a memorandum of understanding had been signed, marking a significant step forward in the cooperation.
He also said Iran has established strong ties through other frameworks, including BRICS and with neighboring countries, adding that these efforts are being pursued seriously and that positive developments are expected to be announced in the near future.
"One of our key programs is to establish banking relations with regional and international institutions and structures," he said.