Iranian bank applies for Turkish banking license

Iran's Bank Pasargad has applied for a license to operate in Turkey, a banking sector official told Reuters on Monday, but its bid was seen having little chance of success given global efforts to isolate Tehran over its nuclear program.

Pasargad's move is a fresh sign of the strengthening commercial ties between the neighboring countries in recent years but coincides with growing U.S. pressure on Turkey and other countries to curb oil purchases from Iran.

Turkish media reported at the weekend that three Iranian banks, including Pasargad and Bank Tejerat, had applied to the Turkish banking watchdog for a banking license.

A Turkish banking sector official said only Bank Pasargad had applied recently to the BDDK banking regulator, doing so around 20 days ago.

Officials from Bank Pasargad were not immediately available to comment.

"These three banks applied 4-5 years ago and only one of them was viewed favorably," a source close to the Iranian banking sector said.

"In this environment when the whole world is pressuring Iran, it is impossible for the BDDK to approve. Even if they provide 300 million lira ($166 million) capital, why and how should the BDDK approve this?" this source added.

The West accuses Iran of seeking to develop a nuclear weapons capability. Tehran denies that, saying its program is intended to produce only electricity and medical isotopes.

The United States is implementing tough sanctions passed by Congress last year targeting Iran's central bank and countries that fail to make "significant" cuts to oil purchases from Iran.

Trade between Turkey and Iran has risen sharply over the past decade, and Turkey was regarded as a possible weak link in the international sanctions against Iran.

Relations between the two neighbors, however, have been strained by Tehran's support for Syria's President Bashar al Assad, while Turkey has called on Assad to leave power.

Washington last week granted Turkey a 180-day exception from financial sanctions as a result of the cut in oil purchases from Iran made by Turkish refiner Tupras.

The United States has pressed Turkey to follow up on the 20 percent reduction with a further cut in six months time to help persuade Iran to quit stalling in talks over its nuclear program, a U.S. diplomat said last week.

The latest round of nuclear talks between Iran and six world powers started in Moscow on Monday, with no immediate sign of the progress needed for any lifting of sanctions.

Turkey was Iran's fifth-largest oil customer in 2011, buying around 200,000 barrels per day, 30 percent of its total imports and more than 7 percent of Iran's oil exports.

Turkey cut its imports from Iran to 140,000 barrels per day in May from an average of 210,000 bpd in the first four months of this year, shipping data showed. ($1 = 1.8115 Turkish liras)

Source: REUTERS