Background
The formation of a modern national bank that would keep foreign influence in check became a topic of debate in Qajar Iran during the last quarter of the 19th century, following similar debates in the Ottoman Empire following the establishment of the foreign-controlled Ottoman Imperial Bank in 1863. In 1879, a proposal along such lines was made to emperor Naser al-Din Shah by Tehran business leader Haj Muhammad Hassan Amin al-Zarb.[6] During the Persian Constitutional Revolution, the aspiration to financial independence became a major political issue,[7] leading to the publication of a manifesto promoted by a group of prominent merchants in December 1906.[8]
On 23 November 1906, Abolqasem Naser ol-Molk, the Minister of Finance of the time of Mozaffar ad-Din Shah Qajar, reported to the National Consultative Assembly about the country's financial crisis and suggested a loan from European countries to deal with it, but the deputies rejected that option and, on 9 December, agreed to establish a national bank instead. But the abrupt changes in the political environment and the Anglo-Russian Convention of August 1907 prevented that vision from becoming reality until after the 1921 Persian coup d'état and the establishment of the Pahlavi dynasty in 1925.[9] Soon after cementing his rule, Reza Shah started considering a revival of the national bank project, intended as a departure from Persia's previous dependency on foreign finance embodied by the Imperial Bank of Persia.
National bank of issue
The bank was initially established as Banque Nationale de Perse (lit. 'National Bank of Persia') in 1928, based on a law approved by the National Consultative Assembly on 1927-5-14. The bank's statute was approved by the National Consultative Assembly's Finance Committee on 1928-7-14. The bank started operations on 1928-9-8,[10] originally located in the former building of the Persian Tobacco Régie.[11][12] Its initial capital was 20 million Rials, of which 8 million were paid. It soon opened two branches in addition to its head office, in Tehran's Grand Bazaar and in Bushehr, the country's most important commercial port.
Due to the fact that there were no bank specialists in Iran at that time, the law allowed the recruitment of Swiss or German nationals for the administration of the bank. The first CEO of the National Bank, Kurt Lindenblatt, and its vice-president, Otto Vogel, came to Iran together with other experts from Germany. The number of bank employees on the opening day, including Iranian and German, did not exceed 27.
On 1931-3-22, the National Consultative Assembly granted Bank Melli Iran a monopoly on banknote issuance for 10 years, automatically renewable for another ten years if not formally canceled in the meantime.
Commercial bank
In 1960, the creation of the Central Bank of Iran put an end to the role of Bank Melli Iran as a bank of issue. Bank Melli Iran went on as a commercial bank.
In 1965, it opened its first international branch in Hamburg.[10] In 1967, it opened branches in London, which in 2002 were reorganized as a fully owned subsidiary named Melli Bank plc.[16]
Since the Islamic Revolution
After the Islamic Revolution, changes to the banking system were implemented in order to conform with Sharia law in the realm of Islamic banking and finance. The new law was passed in 1984. There are more than 3328 active branches inside, 14 active branches and 4 subsidiaries abroad and 180 offices.
In 2002, BMI established a Russian subsidiary, Mir Business Bank in Moscow. In 2004, it partnered with Bank Saderat Iran to establish Arian Bank in Kabul. In 2006, it also established a branch in Hong Kong.[10]
