Bank Melli: A global bank under scrutiny for links to sanctions and terrorism financing

Despite international sanctions, Iran’s oldest bank continues to operate globally with branches in key cities worldwide

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One of Iran’s oldest banks, Bank Melli has managed to maintain a presence across Europe, the Middle East, and Asia, even as its operations have been linked to terrorism financing and sanctions evasion. With branches in Iraq, Russia, and the UAE, the bank continues to operate amid fluctuating licensing and allegations, showing resilience in the face of international scrutiny.

Established on September 11, 1928, Bank Melli has stakes in various Iranian companies from oil and gas and steel, to pharmaceutical, insurance and food.

Bank Melli had 3,125 domestic branches in the 2019-2020 fiscal year but in the 2023-2024 fiscal year its branches were reduced to 2,672 branches. 

According to an archived version of the BMI website from July 2024, the bank has active branches in Baku, Paris , Hamburg, and Muscat, 7 Branches in the UAE (2 in Dubai and 1 in  Sharjah, Fujairah,  Abu Dhabi , Al Ain, and Ras Al Khaimah each), and 3 branches in Iraq in the cities of Najaf, Baghdad and Basra. 

In February 2024, Reuters reported that Iraq had revoked Bank Melli’s license to operate in the country. However, the bank’s license was reinstated one month later. 

Bank Melli’s financial reports have not been updated on its website since the 2014-2015 fiscal year, however, its last available financial document stated that Bank Melli holds shares in the Saudi- based Islamic Development Bank (IDB) and Samba Financial Group, Future Bank, in Bahrain, and Arian Bank in Afghanistan. 

According to Islamic Development Bank website, the bank holds a 7.9% (4.6 bn) stake in ID. Samba Financial Group merged with the National Commercial Bank (NCB) in 2021 to become the Saudi National Bank (SNB). It is not clear what happened to Bank Melli’s shares in Samba. 

The Future Bank of Bahrain was established in 2004 as a joint venture between Iran’s Bank Melli and Bank Saderat, and Bahrain’s Ahli Bank. Bahrain closed down Future Bank in the country in 2016. However, Future Bank’s branch on Kish Island which was opened in 2007  and was still operational in 2017. I was unable to find any records or reports of its activities in Iran beyond 2017.

Arian Bank in Afghanistan is another joint venture between Bank Melli and Bank Saderat, which was established on June 25, 2004. The bank  lost its license to operate in Afghanistan in 2019  but its license was reinstated in 2020. Although its website is now defunct, according to Google it is still open for business in Afghanistan.

Bank Melli’s  2014-2015 financial documents also lists Melli Bank PLC in London, and Mir Business Bank in Moscow as the bank’s foreign subsidiaries. 

Melli Bank PLC in the UK was incorporated in 2001 and had two branches in France and Hong Kong. The French branch of the company was incorporated in 2018 and dissolved in 2021. The Hong Kong one is still operational. 

Mir Business Bank (MBB) in Russia was established in January 2002, and facilitates financial transactions between Iran and the Russian Federation, according to its website. MBB’s headquarters is in Moscow and has branches in Kazan and Astrakhan.