Iran is planning to license private sector banks, says a governor of its central bank, Dr Seyed Mohammad Hossein Adeli, now charged with a major reform of the country’s financial system. “The financial sector in Iran is gradually opening up to the world. Permitting private banks to be established and operated; allowing foreign banks to operate in Iran; introducing privatisation of some public banks; and, allowing foreign investors to invest in the Tehran Stock Exchange, are all measures indicating that the financial sector is determined to open up to the world,” he says. Dr Adeli says the private sector is expected to play a greater role with the privatisation of $350 billion of public assets. Countering US claims that Iran is heading towards isolation and economic hardship as a result of the nuclear stand-off, he downplays the impact of sanctions on Iran and is upbeat about the country’s financial future. Iran is one of the few countries in the world to have converted its entire financial sector to an Islamic system and as a governor of the Central Bank of Iran, Dr Adeli is credited with leading major reforms in the country’s financial sector. He is currently chairman and CEO of the Ravand Institute for Economic and International Studies in Tehran. “Given the size of Iran’s foreign exchange reserves on the one side - with foreign reserves exceeding $30 billion, and foreign trade reaching $150 billion - and foreign trade transactions of Iran worldwide, there is a fairly strong connection between international financial institutions and Iran’s financial sector.” On the role of the private sector, Dr Adeli said: “The entrepreneurial spirit and tradition is very strong in Iran, although private sector activities were circumscribed due to the Iran-Iraq War. Nevertheless the thrust for privatisation and the intention of providing a meaningful role to the private sector has increased. “A bill is being currently debated in the parliament with a view to privatising some $350 billion of public assets. It is estimated that the process will take seven years to complete as a result of which the role of private sector will increase significantly in all sectors of the economy.” Dr Adeli dismisses the impact of sanctions on financial operations. “With the vast network of financial ties Iran has developed over the past decades, companies are busy working out the easiest and most practical alternatives for their financial transactions,” he said. “Banks in Dubai have traditionally been one alternative but it is by no means the only option. “These days, some countries – mostly in the East and to a lesser extent a few in the West – are still willing to cooperate with Iran given the fact that Iranian transactions are huge and profitable.” Dr Adeli sees Islamic finance as complementary to the conventional finance system but sees room for further improvement. “So far the improvement has originated from the side of experts initiating and developing various kinds of financial instruments compatible with Shariah laws,” he added.