Iran has dissolved Ayandeh Bank, one of its largest commercial lenders, after years of mounting debt and regulatory failures, in a move that underscores deep-rooted dysfunction in the country’s isolated banking system.
The Central Bank of Iran (CBI) announced on Thursday that Ayandeh’s clients, employees, and branches will be merged into state-owned Bank Melli starting Saturday. The decision follows a prolonged restructuring effort that failed to restore the bank’s solvency.
Central Bank Governor Mohammad Reza Farzin described Ayandeh as “a symbol of inefficiency and the structural imbalances that have plagued Iran’s banking sector over the past two decades.”
He added that despite extensive efforts, “it was impossible to place the bank on a path toward reform.”
According to Hamid Reza Ghani Abadi, the CBI’s director of banking supervision, Ayandeh’s capital base had shrunk to the equivalent of just $15 million, while its liabilities exceeded $5.5 billion, based on unofficial market exchange rates.
Much of the bank’s capital had been tied up in large real estate and infrastructure projects — including the massive Iran Mall complex on the outskirts of Tehran, many of which remain incomplete.
Officials say the bank fueled “destructive competition” in the sector by offering unsustainably high deposit rates to attract funds and cover payouts on existing accounts.
Ayandeh Bank was formed between 2013 and 2014 through the merger of three debt-ridden credit institutions and quickly grew into one of Iran’s biggest private lenders. However, by 2019, when the Iran Mall officially opened, the bank was already under direct supervision of the central bank, amid speculation, later denied, that it was on the brink of collapse.
The state eventually forced Ayandeh to sell its stake in Iran Mall’s development company and halt further large-scale lending, after loans to that project alone reached $7.6 billion by 2017. Ironically, that same year, Ayandeh won Euromoney’s “Best Banking Transformation in the Middle East” award.
The closure follows public criticism from Judiciary Chief Gholamhossein Mohseni Ejei, who accused the central bank and Ayandeh executives of negligence and allowing the bank’s losses to multiply since it was placed under special supervision in 2019.
The intervention comes amid heightened efforts by Iranian regulators to clean up the banking system, which has long been cut off from global finance due to U.S. sanctions and noncompliance with international anti-money laundering (AML) and counterterrorism financing (CFT) standards.
In a rare policy shift, Iranian President Masoud Pezeshkian this week approved a bill enabling the country’s banks to adopt a UN convention aligned with the Financial Action Task Force (FATF) framework, a move aimed at easing Iran’s pariah status in global finance.
The approval coincided with the first official Iranian visit in six years to FATF headquarters in Paris, led by Hadi Khani, deputy economy minister and head of Iran’s Financial Intelligence Center.
Analysts say the closure of Ayandeh could signal a broader restructuring push within Iran’s troubled banking system, though political resistance from hardline factions continues to hinder full adoption of international transparency standards.
Iran’s banks remain burdened by non-performing loans, capital shortages, and international isolation. With Ayandeh’s downfall, regulators face growing pressure to prevent contagion and reassure depositors that the rest of the sector remains stable.
For now, officials say the merger with Bank Melli will protect customers’ deposits and maintain essential services, but for many Iranians, the collapse of a once-celebrated private bank is a stark reminder of the country’s deepening economic fragility.
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