(Wikipedia) - Imperial Bank of Persia Imperial Bank of Persia, Teheran, 1902
The Imperial Bank of Persia (Persian: بانک شاهی ایران) was a British bank that operated as the state bank and bank of issue in Iran (generally known as Persia until the 1930s) between 1889 and 1929. It was established in 1885 with a concession from the Persian government to Baron Julius De Reuter.Imperial Bank of Persia (at right), Teheran, 1910
The bank pioneered modern banking in Iran. The legal centre of the bank was in London and whilst it was subject to British law, its activities were based in Tehran. It also had operations in other Middle Eastern countries. It was later named British Bank of the Middle East (BBME) and is now called HSBC Bank Middle East Limited. After the Iranian Revolution of 1979, all the Iranian activities of this bank were transferred to Bank Tejarat. Contents
Background and history
- 1 Background and history
- 2 Assessment
- 3 See also
- 4 External links
- 5 References
Nineteenth-century Iran has been described as "one of the most backward countries in the world." The traditional money lenders in Iran were the Jewish sarrafs, who continued to dominate the field after the Imperial Bank''s arrival due to greater loan flexibility and cultural ties.
The Imperial Bank of Persia was established in 1889 on the basis of a 1872 concession to Baron Julius De Reuter from the Persian government which made it the state bank, with the exclusive right to issue notes and tax free status for sixty years. The Imperial Bank was publicly floated in London.
Between 1889 and 1928, the bank operated as the state bank and bank of issue of Iran, and held a virtual monopoly on banking in the country. Sir William Keswick was the bank''s chairman. The bank was principally funded by Glyn, Mills & Co., J. Henry Schröder & Co. and David Sassoon & Co.. Despite holding a monopoly, the bank''s management was farcical, according to Geoffrey Jones, and the bank struggled to make a profit.
By 1928 the bank had 24 branches in all major Iranian cities.
Between 1928 and 1952, the Imperial Bank was subject to criticism and attack from the nationalistic Iranian governments. Bank Melli, an Iranian-controlled central bank, was established in 1928. In 1933, Imperial Bank was forced to relinquish its note-issuing powers. In the 1930s exchange controls and barter agreements destroyed the Imperial Bank''s business in financing foreign trade. Imperial Bank began to rapidly lose market share to Bank Melli, and by 1939 the Imperial Bank held just 9 percent of Iranian bank deposits. The bank sold off half of its branches in the 1930s.
In the 1940s the bank opened branches in the Gulf States, and was the first bank in Kuwait, Dubai and Oman. In 1952, the bank abandoned the Iranian market and renamed itself the British Bank of the Middle East. In 1959, the British Bank of the Middle East was acquired by Hongkong Bank (now HSBC), and now forms part of its HSBC Bank Middle East subsidiary. Assessment
According to Jones, "the Bank was widely seen as an agent of British imperialism, and with reason". Jones argues that during the two World Wars and in the early 1920s, the bank placed British diplomatic interests before those of Iran.