Sunday 20 Apr 2014


  Savings Account

1- GHARZOLHASSANEH SAVINGS ACCOUNT
Gharzolhassaneh Savings Accounts are one of Bank Mellat Gharzolhassaneh Accounts. These accounts bear no interest, but the owners of these accounts can enjoy thousands of valuable bonuses in a festival of these accounts. One point is given to the owners of these accounts, for every Rials 200,000 per day maintained with the Bank. 
- Ordinary gharzolhassaneh savings account,
- Keshavarzi gharzolhassaneh savings account.
- Gharzolhassaneh savings account for young adults,

Documents and Conditions Needed for Opening Gharzolhassaneh Savings Account
Our valued customers can refer to one of the branches of Bank Mellat, present required documents as listed below, complete the special forms and deposit an anticipated minimum amount, and open Gharzolhassaneh savings account.
1- The customer must be at least 12 years old,
In this case, in order to withdraw from the account, the holder must be 15 years old. 
2- Presenting original and copies of the applicant’s ID card and national ID card of the account opener,
3- Completing the bank’s forms,
4- The minimum amount required to open the account is Rls. 50,000 and for the account to be participated in Gharzolhassaneh Savings Acounts Festival is Rls. 20,000.
5-  A mother may open a gharzolhassaneh savings account for her minor child and as long as the child is not 18 years old, the mother is the only person with the right to withdraw money from the said account.

The Mechanism to Score Gharzolhassaneh Savings Deposits for Participating in the festival
Each year, in order to encourage the holders of Gharzolhassaneh Savings Account for carrying out the God-pleasing act of Gharzolhassaneh, bank mellat grants precious rewards, including cash and noncash. In this context, this bank has designed the scoring system of these accounts as the first state bank.
The scoring method in bank mellat is as follows: For every Rls. 200,000 rials of credit balance per day, one point is given to the depositor during the festival period, which is usually one year.
e.g.: if a person has deposited an amount of Rls. 1,000,000 from the beginning up to the end of the year, he will receive a score of 1825 (5 points per day), as a result with the increase of credit balance in the account over the festival period, he will increase his chance to be chosen as the winner.

Conditions for Participating in the festival and Granting Rewards
1- The amount of Rls. 200,000 is kept in the customer’s account for 3 consecutive months (90 days) during the festival period.
2- Increasing the account balance on the final deadline for opening the account or completing the balance, for Rls. 200,000 for those customers who do not maintain the conditions set forth in Para. 1 above. It is obvious that the said amount must be kept in the account for 3 consecutive months (90 days).

Special Services for Gharzolhassaneh Savings Account:
All services of mellat electronic current accounts including internet banking, telephone bank mobile bank and SMS bank (except the service related to checks) are provided for holders of Gharzolhassaneh Savings Account.

2- Investment Deposit
Term investment deposits are the moneys deposited by people in the banks for investment and they choose the bank as their agent for utilizing and employing the deposit according to the stipulations set out in Usury Free Banking Operations Act.

Accepting term deposits in Mellat Bank is as follows:
- Short-term investment deposit,
- Long-term investment deposit,

A) Short-Term Investment Deposit
Short-term investment deposits are those deposits that are kept with the bank for at least 30 days and the amount of deposit is not less than the minimum amount set for opening the account.
The basis for calculating the short-term investment deposits is the minimum balance per day.
In this relation in order to pay interest to short-term investment deposits, the balance of the accounts must always be equal or more than the minimum amount set.
- The interest paid to short-term investment deposits is calculated at the end of the working month and will be deposited to the client’s account at the early hours of the next working day.
- Regarding those short-term investment deposits opened over the month, an interest equal to the number of days the funds are deposited will be paid to them.
- The minimum period required for interest to be accrued and paid is 3 months. So, in case the account is closed within a time interval of less than 3 months from the date of opening, the interest(s) paid will be returned.
- At present, the minimum amount for opening the short-term investment deposit account and calculating the interest is Rls. 100,000.
- No interest will be paid in the day the account is opened.
- No interest will be paid in the day the account is closed.
- The formula for calculating the interest to short-term deposits is as follows:

Interest rate X number of days deposited X amount of deposit

=

Accrued Interest

365 X 100


- Special Ordinary (Non-centralized) Short-Term Investment Deposit
With a few differences, this deposit shares the same conditions with short-term investment deposit. Below please find the general terms and conditions of this account in Bank Mellat.
1- A deposit certificate is issued and submitted against receiving the deposit.
2- The on-account interest rate of investment deposits (including short-term, special short-term and long-term) is announced each year by Central Bank of the Islamic Republic of Iran.

 

Type of Deposit

Minimum Amount for Opening the Deposit and Accruing of Interest

Deposit Interest Rate (Percent Per Year)

Short-term

Rls. 100,000

6%

6-month special short-term

Rls. 500,000

8%

9-month special short-term

Rls. 500,000

10%

 
3- The legal age for opening this account is 18.
4- The applicant should introduce another account with the bank (including Gharzolhassaneh current account, Gharzolhassaneh savings account or short-term investment deposit) for depositing the interest.
5- In case this account is closed before the due date, the deposit shall be subject to the provisions and regulations of the Bank, which terms and conditions have been inserted in the related contract.
6- These deposits may be extended for similar terms and amounts as the original term and amount. The holder of the account can, upon opening the account, assign the bank with option to extend the deposit in the first due date as well as in the next due dates. 
7- In case the special short-term deposit is extended, the said deposit is considered as a new deposit and it shall be subject to the provisions effective in the year in which it is extended.
8-  The interest to special short-term deposits are paid on daily basis and any time the deposit is opened, the interest will accrue and paid to the customer’s interest deposit account on the first working day of the next month for the number of days the deposit is kept with the bank.
9- Withdrawal, deposit, cancellation, blocking of the account and amount, reduction and/or closing the accounts may be done in all branches.
Note: Unblocking of the account and amount, shall be possible only by the blocking establishment.

 

B- Long-Term Investment Deposit
Long-term investment deposits are those deposits kept with the bank for one year and the amount of deposit shall not be less than the amount designated for opening the deposit. According to the concluded contracts, Bank Mellat guarantees the return of the principal long-term investment deposits.
Table below shows types of the long-term deposits, the minimum amount required for opening the deposit as well as the on-account interest rate in the current year in Bank Mellat:

 

Type of Deposit

Minimum Amount for Opening the Deposit

Deposit Interest Rate

One-year

1,000,000

12.5%

Two-year

1,000,000

13%

Three-year

1,000,000

14%

Four-year

2,000,000

14.5%

Five-year

2,000,000

15%

 


At present, the interest to long-term deposits is calculated at the end of each month on on-account basis and paid to the client’s designated account at the first hours of the next working day.

 

Conditions for Opening the Account
- The legal age for opening this account is 18.
- The applicant should introduce an account with the bank (including current account, savings account or short-term deposit) for depositing the interest.
- In case this account is closed before the due date (for 1, 2, 3, 4 and 5 year deposits), the deposit shall be subject to specific provisions and regulations, laid down in the related contract, as read and signed by the client.
- These deposits may be extended for similar terms and amounts as the original term and amount. The holder of the account can, upon opening the account, assign the bank with option to extend the deposit in the first due date as well as in the next due dates. 
- In case the special long-term investment deposit is extended, the said deposit is considered as a new deposit and it shall be subject to the provisions effective in the year in which it is extended.
-  The interest to long-term investment deposits in Bank Mellat are calculated on daily basis and in case the client claims the whole or part of the long-term investment deposit in an earlier time than the agreed date, the on-account interest paid to the customer shall be analogous to the duration in which the deposit is maintained with the bank, after deducting 0.5%.
- In this relation, in case the amount of deposit is claimed in an earlier time before 30 days, no interest shall be accrued to the deposit or amount so claimed.

Transfer of Long-Term Investment and Special Short-Term Deposits 
Bank Mellat has provided the facilities for transferring long-term investment and special short-term deposits to other persons (next of kin of the depositor), and in this regard the transferor (account holder) and the transferee shall refer to the bank and take the following measures:
1- Completing the transfer application form, 
2-  Endorsement of the deposit certificate by the transferor, with the signatures of the transferor, the transferee and the bank having been affixed thereto,
3- Introducing an account for deposit of interest by the transferee and submission of the deposit certificate to the transferee by the bank,

Withdrawal from Long-Term Investment Deposits and Special Short-Term Deposits
The holders of long-term investment deposits and special short-term deposits with Bank Mellat can, if required, withdraw part of their money in the deposit. To do this, the client should refer to the branch and complete the withdrawal form. In case of withdrawal from these accounts before the due date, the interest paid to the client will be adjusted.

Facilities
Gharzolhassaneh Loans
Gharzolhassaneh is an arrangement under which the bank (lender) lends a specified amount to natural and/or legal persons (as borrower) under agreed terms and conditions. The borrower’s repayment obligation is only equal to the amount received plus a commission. The share of the Gharzolhassaneh loan granted by each bank, the ceiling of facilities granted to the applicants and its commission are specified annually by Central Bank of the Islamic Republic of Iran. The maximum total interest-free loans granted by each bank are equal to the cumulative Gharzolhassaneh savings deposits.
The duration for repayment of Gharzolhassaneh loans granted for meeting the needs of natural persons with respect to the costs of marriage, dowry, disease treatment, house repairs, educational contributions and assistance for construction of houses in villages is maximum 3 years.

Required Documents
1- Applicant’s written request,
2- Other documents as evidences for the applicant’s request, as discerned by the loan approval authority,

Proceedings
1- Receiving the applicant’s written request and related documents,
2- Examine the applicant’s request and approve the credit as per the powers delegated by the Bank’s competent authorities,
3- Executing a Gharzolhassaneh Contract,
4- Granting Gharzolhassaneh facilities,

Installment Sale
In a general sense, installment sale means transfer of an object of sale at a fixed price, so that all or part of the said price is received in equal or unequal installments on specified due dates.
Installment sale arrangements can be used for:
Installment sale of properties, raw materials, spare parts and work tools, transportation devices, durable consumables, production equipment, machinery and installations,

Installment Sale of Real Estates
According to Usury-Free Banking Operations Act, in order to create necessary facilities for expansion of housing industry, the bank can sell under an installment arrangements low-priced houses that are constructed directly or through granting any type of bank facilities, only based on the written request and commitment of the applicants for purchasing these units.
Before entering into contracts, the bank receives a down payment from the applicants of the residential units. This down payment is currently 20% of the cost. The bank shall take in pledge under a mortgage contract the entire six portions of the residential unit until collection of all receivables.
The contract duration is subject to the relevant regulations and the interest rate of this contract is different as the case may be.

Installment Sale of Raw Materials, Spare Parts and Accessories
In order to provide working capital of the manufacturing units, whether they belong to natural or legal persons, and only based on the written application of the customer and his commitment for purchase, bank mellat will purchase the spare parts, consumable tools and other primary needs of them and sell to the applicants under an installment arrangement.
These facilities are calculated based on the official price of raw materials and regarding those commodities for which there are no official prices, the bank will have the right to set their prices. The duration for collection of the price of installment sale of properties and goods, subject of the Loan Directive, shall not exceed one production period or maximum one year. Of course, the facilities for weaving carpets and nonproductive live animals will be two years for one production period and for financing the working capital of new production plans, the collection period will be set by the bank for more than one year, as the case maybe.
The interest rate of this type of contract depends on the applicant’s field of activity.

Installment Sale of Production Equipment, Machinery, Transportation Vehicles, Durable Consumables and Installations
In order to expand the industry and mine, agricultural and service activities, the bank may, upon the applicant’s request and commitment, purchase the movable properties, including purchase and consumption or utilization the requested property (ies), and sell them to the customer, under an installment sale arrangement, provided a collateral is received by the bank.
The duration of installment sale contract and repayment of installments shall be maximum equal to the useful life of properties subject of the contract, as determined by the bank.

Proceedings
1- Receiving the applicant’s application and related documents,
2- Examining the applicant’s application and approving the credit based on the powers delegated by the competent authorities of the bank,
3- Executing installment sale contract,
4- Granting facilities,

Civil Partnership
Civil partnership is one of the effective contracts in order to establish facilities for manufacturing, commercial and service activities. Civil partnership means the combination of cash or in kind contributions of several natural or legal persons, in a joint venture, in order to gain profit and as per the contract. The applicants may enjoy this type of bank facilities considering the effectiveness of this type of arrangement. Following are the cases where civil partnerships can be used:
1- Producing and selling products,
2- Importing machinery, raw materials and work tools,
3- Importing goods for the purpose of sale,
4- Export of goods,
5- Domestic trading,
6- Individual or bulk building construction,
7- Services

In order to carry out civil partnership transaction, the subject of transaction, the necessary capital required for partnership, collaterals and price of goods, and the approximate expenses and cost, selling price and its mode, the bank’s and applicant’s shares of profit must be specified.
The duration of a civil partnership contract is determined at the beginning of the contract, taking into account the nature of the subject activity and as discerned by the bank and agreed by the partner. Maximum volume of the bank’s partnership in each civil partnership is 80 percent of the total capital.

Required Documents:
1- Customer’s written application,
2-1 For natural persons: original ID card and a copy, and the activity license,
2-2 For legal persons: Articles of Association, Certificate of Incorporation, Official Gazette and the latest notice of changes,
3- In case the goods subject to partnership have been imported, a P/I related to the goods purchase order and the copies of necessary licenses,
4- Other documents and papers related to transaction and investment subject of partnership, as discerned to be necessary by the validity approving body and that would prove the occurrence of partnership,

Proceedings:
1- Receiving the applicant’s written request and related documents,
2- Examining the applicant’s application and approving the credit based on the powers delegated by the competent authorities, 
3- Executing civil partnership contract and paying the participation contribution, 
4- Supervising the execution of the subject of partnership by the bank,
5- Settling and completing the subject of partnership,

Foreign Currency Deposits
Gharzolhassaneh

In line with presenting modern and quality banking services to our dear compatriots at the international level and with an approach on the importance of international banking operations in today’s world, Bank Mellat hereunder introduces some of its foreign exchange services, presented throughout this bank.
By applying international banking standards and using modern technologies, while moving in the path of electronic banking, Bank Mellat has focused on presenting a full range of foreign exchange services in order to fulfill its important role in this industry. Bank Mellat is also ready to present all foreign exchange services in its FOREX Branches in order to facilitate the trading in line with macro policies of the government for development of non-oil exports

Foreign Exchange Savings Gharzolhassaneh Account
After referring to one of the Forex Branches, the valued customers applying for opening foreign exchange gharzolhassaneh account, can open foreign exchange savings gharzolhassaneh account.
Documents and Conditions for Opening Foreign Exchange Savings Gharzolhassaneh Account
1- Presenting the original ID card and a copy,
2- Completing account opening form,

- Please note that the minimum balance of the account for participating in Savings Gharzolhassaneh Account festival,  will be 50 Euros or its equivalent in other foreign currencies.
- When exchanging foreign currencies to Iranian currency (Rials), the holders of foreign exchange gharzolhassaneh account, are exempt from paying commission.

Foreign Exchange Current Account
Foreign exchange current account is one of the various types of Bank Mellat Gharzolhassaneh Account, opened for applicants including natural and legal persons in compliance with the applicable rules and regulations. The holder of the account issues the order for payment of funds deposited to his/her account. Natural and legal persons may open the following accounts:
The account can be opened for:
1- Iranian natural persons,
2- Foreign natural persons,
3- Joint accounts
4- Iranian legal persons,
5- Foreign legal persons,
6- Iranian and foreign banks

Documents and Conditions for Opening Gharzolhassaneh Current Account
Applicants for opening foreign exchange current account in Bank Mellat, including natural and legal persons, can open foreign currency current account if they are qualified to open domestic currency current account in Bank Mellat and upon presentation of the following documents and completing the special forms and current account opening form and a reference (one who is known to Mellat Bank). 

Conditions and Documents for Opening the Account
The applicant must:
1- be at least 18 years old.
2- be a literate person, able to read and write,
3- have reference: for foreign natural persons, the reference could be one of the customers of the bank or a person who is known to the manager of the bank branch and/or a letter of reference fro one of the state organizations and embassies of the respective country, indicating the identification and approval of such persons, along with the original and a copy of the passport and residence permit in Iran,
4- must not be deprived from opening current account in domestic and foreign currencies,
5- the ID card, bearing the holder’s photo, and a copy thereof,
6- the company’s articles of association, certificate of incorporation and the notice of establishment and the latest notices of changes in the official gazettes regarding the legal entities,

Note: Opening current account for agency offices of foreign banks and companies, registered in Iran, is the same as Iranian companies.
When exchanging foreign currency to Iranian Rials, the holders of foreign currency gharzolhassaneh current account are exempted from paying commission.

Short Term & Term Investment Deposits in Foreign Currency
The valued customers of Bank Mellat, who intend to apply for opening foreign currency term deposit accounts, must refer to one of FOREX branches of Bank Melalt, present the required documents, and also complete and sign the forms and papers. 
In order to open the account, the applicant must:
1- be 18 years old,
2- present the original and a copy of his/her ID card,
3- open a foreign currency account at the same currency with the opening branch for deposit of interest,
4- the interest of foreign currency term deposits will be payable in the respective foreign currency on the due dates,

Special Short Term Investment Deposit Account in Foreign Currency
Minimum acceptable amount for opening and balance of special short term investment deposit account in various currencies is as follows:
200 Euros, 300 CAD, 200 GBP, 50,000 JPY, 500 SFr., 2,000 AED, and 2,000 Saudi Riyal (SR),
The on-account interest payable to special short term investment deposit account in foreign currency shall be calculated on daily basis and taking into account the minimum balance of each day and deposited to the same account at the end of each calendar month as the last turnover of the account.
 
Documentary Credits
Documentary credits is a method to guarantee payment, under which the bank undertakes to pay a definite amount to the seller of goods or services, provided the seller presents the documents for shipment of goods or completion of services.

Opening Sight Documentary Credits for Imports
Eligible Persons
All natural and legal persons
Type of Goods
All authorized merchandizes according to the provisions of Export & Import Act,
Proceedings
- The customer refers to the relevant ministerial office and presents a P/I and receives goods import permit,
- The customer refers to Ministry of Commerce and obtains the goods import permit,
- Presentation of order registration documents sealed by ministry of commerce, P/I, insurance policy and if required, the permission issued by Transportation Organization and the state terminals, to any of Foreign Currency Branches of Bank Mellat,

Note: For governmental purchases with the value of above USD 1 million, it is necessary to carry out tender formalities or present a permission for abandonment of tender formalities,
- Examination of the creditability of the customer, issuance of credit agreement and determination of the required down payment,
Note: The volume of down payment for import of all goods by ministries and governmental offices, that use public budget, is 100% of the amount of credit on the opening date,
- Customer shall pay the costs for opening L/C,
- Opening L/C through sending swift message,
- Transportation of goods and receiving shipment documents from the agent,
- The customer shall pay the difference of the amount required and the initial down payment, and endorsement and delivery of documents to the customer for clearance of goods,

Opening Documentary Credits by Using Short Term (Maximum One Year) Interbank Credit Lines (Refinance) Concluded by Central Bank of Islamic Republic of Iran and Bank Mellat

Eligible Persons: All manufacturing and trade importers, that are engaged in import of goods, raw materials, spare parts, machinery for production lines as well as services, can use the maximum one year interbank credit lines to open refinance documentary credits.
Authorized Persons: Natural and legal persons including manufacturing and trade entities with a credit record of at least 5 years, producers and importers of drugs and pharmaceuticals, auto and part manufacturers,
Authorized Merchandizes
Proceedings

1- The customer will refer to the Rial branch in which he/she has an account and present the application for using facilities,
2- Issuance of credit agreement by relevant authorities (branch, Branches’ Affairs Administration, General Department of Credits and Bank Mellat Board of Directors), based on the delegated powers,
3- The reflection of the application through the Foreign Currency Branches along with the copies of resolutions, order placement forms and P/I to General Department of Foreign Currency Operations and/or General Department of International Affairs,
4- Obtaining permission from General Department of Foreign Currency Operations including the allocation of credit line contracts concluded by Central Bank or allocation of credit line by General Department of International Affairs out of the concluded contracts,
5- Presenting insurance policy, paying the costs for opening and down payment at the amount of 10%, by the customer, and consequently, opening of the documentary credit through sending a SWIFT message,
6- Issuance of certificate of statistical registration by Bank Mellat General Department of Foreign Currency Operations after receiving the copies of the documents showing the opening of credit, order placement forms and the related P/I from the foreign currency branch,
7- Presenting a copy of the SWIFT message for opening credit to Foreign Currency Credits Dept. of Central Bank of the Islamic Republic of Iran for issuance of Letter of Inclusion (LOI),for those contracts that need the issuance of LOI.
8- Paying almost 10% of the principal and interests of the credit by the customer at the time of exchange of documents, endorsement and delivery of documents to the customer,
9- Paying maximum 80% of the remaining part of the principal and interests of credit by customer on the due date when cash funds are paid to the agent,

Explanation 1: That part of the sum of documentary credits that is paid to the seller by the agent at the time of exchange of documents , is considered as facilities granted.
Explanation 2: These facilities are considered within the authorized personal limit of granting facilities.
Explanation 3: Granting facilities more than the authorized personal limit is subject to obtaining license from Central Bank of the Islamic Republic of Iran.

Import of Services and Goods/Services Through Opening Documentary Credit
Eligible Persons: All natural and legal persons,
Type of services: consulting services of foreign experts, carrying out training inside or outside of the country, expertise services including installation and operation of the devices sent abroad, ISO services, using computer networks like internet and hiring of machineries, design and engineering documents, … with the value of 900,000 USD, in case the import of services and/or goods/services with the value higher than the said amount are taken into consideration; it is necessary to obtain license from Central Bank of the Islamic Republic of Iran,

Proceedings:
For P/Is issued for import of goods/services:
- The customer should refer to the relevant ministerial office, present the P/I and receive the goods import permit,
Note: In case the services are to be imported, the customer should refer to Central Bank of the Islamic Republic of Iran, receive the service placement documents, and refer to Bank Mellat in order to receive the order placement 8-digit number,
Presenting the order placement and or service order placement (based on the above issue), P/I and in case the license issued by State Transportation and Terminals Org. to any foreign currency branches of Bank Mellat,
- Examination of the creditability of the customer, issuance of credit agreement and determination of the required down payment,
Note: The volume of down payment for import of all goods and services by ministries and governmental offices, that use public budget, is 100% of the amount of credit on the opening date,
- Customer shall pay the costs for opening L/C,
- Opening L/C by having inserted the condition for presentation of 10% of good performance bond through sending a SWIFT message,
Note: It is necessary to insert in the terms and conditions of documentary credits, the condition for deducting taxes and other statutory charges from the amount of services as per the regulations of Ministry of Economy and Finance, unless the said ministry confirms that it is not required to deduct tax.
- Presenting work statements and obtaining the buyer’s approval,
- The customer shall pay the difference of the amount required and the initial down payment, and remittance of the fund to the beneficiary,

Import of Goods and Goods/Services through Draft Order Placement
Definition: Imports in the above said case are made when there is a full trust between the parties to the contract.
In drafts for collection, the Bank acts as the trustee and dealer between the buyer and seller, and presents to the buyer, at the seller’s instruction, the documents showing the delivery of goods or completion of services, against receiving the amount of liability and/or accepting the draft.
Eligible Persons:
All natural and legal persons
Authorized Merchandizes
All authorized goods as per the import/export regulations,
Proceedings:
- The customer should refer to the relevant ministerial office, present the P/I and receive the permit for import of goods and/or goods/services,
- The customer should refer to Ministry of Commerce and obtain the goods import permit,
- Presentation to one of the foreign currency branches of Bank Mellat, the order registration forms sealed by Ministry of Commerce, P/I, insurance policy and if required, the permission issued by Iranian Transportation and Terminals Org.,
- Examination of the creditability of the customer, issuance of credit agreement and determination of the down payment portion, if required,
- Notifying the draft number to the customer,
- Receiving the shipment documents attached to the draft by the corresponding bank,
- In case of sight drafts, the customer should pay the sum, endorsement and delivery of documents to the customer and remittance of the sum,
- In case of term drafts, endorsement by the customer, guarantee of payment by Bank Mellat (if so requested), endorsement and delivery of shipment documents to the customer for clearance of goods,

Foreign Currency Letters of Guarantee
Definition: 
A bank letter of guarantee is a written and irrevocable document, for paying a specific amount of cash to the beneficiary of bank letter of guarantee, in case of default of the writer in meeting financial obligations based on the contract made with the beneficiary.
Types of Letters of Guarantee In terms of Nature
Import
Export
1- Import
Import guarantees are those issued against the counter letter of guarantee received from a foreign corresponding bank as a collateral in favor of the Iranian buyers/clients in foreign currency or in Rials.
Point
For the list of the banks acceptable to Bank Mellat as well as receiving the bank’s standard forms and getting information about the requirements within the counter letter of guarantee, please contact Department of Foreign Currency Letters of Guarantee in General Department of Foreign Currency Operations.
2- Export
Export guarantees are those instruments that are issued against collaterals received from the writer (and or counter letters of guarantee by one of the local banks as security) in foreign currency or Rials.
In terms of subject, the export guarantees are divided into three groups:
A- Export guarantees for export technical and engineering services,
B- Export guarantees for export of goods,
C- Export guarantees for domestic contracts,

The above letters of guarantee are issued in the form of tender/bid bonds, good performance guarantee, down payment and other types of letters of guarantee.

Note:
Issuance of tender/bid bonds do not require the permission of Central Bank of the Islamic Republic of Iran.

Services of the Department for Foreign Currency Letters of Guarantee
The services provided by this department with respect to issuance of import guarantees include:
• Good performance guarantee
• Advance payment guarantee
• Tender/bid bond
• Retention bond
• Temporary import guarantee

Our professionals are ready to present the following services:
1- Issuance of foreign currency guarantees needed by exporters of technical and engineering services,
2- Issuance of foreign currency guarantees needed by Iranian contractors, consultants and producers who execute the whole or part of the international projects within the country,
3- Issuance of foreign guarantees required by Iranian exporters for export of goods,
4- Issuance of foreign currency payment bonds in favor of Islamic Development Bank within various types of contracts including:
• Import Trade Financing Operation (ITFO)
• Murabaha
• SUKUK
• Export Finance Scheme (EFS),

A) Export Guarantees for Export of Technical and Engineering Services
Documents required for obtaining license from Central Bank of the Islamic Republic of Iran
Writer’s competency approval certificate showing the ability to execute contract or subject of tender, issued by State Management and Planning Org. (including the ceiling of guarantee), etc.
Obtaining Agreement No. K/27213T/59339 dated 13 Jan. 2004, of the Cabinet from Committee on Art. 19, based in Iranian Trade Development Organization (including the ceiling of guarantee and the total value of the contract),
Completing the guarantee application form on the company’s letterhead with the authorized seal and signature of the company; (an attestation of the letter is required) for presenting to the branch in which the company has an account,
A copy of tender documents (for tender/bid bonds) and copy of the contract or the work reference letter; two copies of the parts related to the contract specifications and the terms of payment (for good performance bonds and advance payment guarantees),

Approval by Bank’s Credit Committee
After obtaining license from Central Bank of the Islamic Republic of Iran,
Presenting the letter of commitment by the applicant stating that in case the amount of guarantee is to be paid to the beneficiary, the guarantee writer shall provide the amount of the guarantee in foreign currency or its equivalent Rials based on the foreign currency rate on the date of guarantee attachment.

Providing the Following Securities
• The value of the securities shall be specified according to the provisions of Letters of Guarantee Issuance Code and endorsement by the banks and based on the company’s capabilities, as discerned by the Bank,
• Annual commission rate for issuance of guarantees for technical and engineering services up to USD 50 million,
0.5% and 0.3 for extra amounts and it shall be borne by the applicant of the guarantee.

B) Export Guarantees for Export of Goods
Approval of the applicant’s competency showing the ability to execute contract or subject of tender, issued by relevant ministry (including the ceiling of guarantee), etc.

Completing the guarantee application form on the company’s letterhead with the authorized seal and signature of the company; (an attestation of the letter is required),
Copies of tender documents (for tender/bid bonds) and copy of the contract or L/C and/or the work reference letter; two copies of the parts related to the contract specifications and the terms of payment (for good performance bonds and advance payment guarantees),
Approval letter issued by the Bank’s Credit Committee,
After obtaining license from Central Bank of the Islamic Republic of Iran
Presenting the letter of commitment by the applicant stating that in case the amount of guarantee is to be paid to the beneficiary, the guarantee writer shall provide the amount of the guarantee in foreign currency or its equivalent in Rials based on the foreign currency rate prevailing on the date of guarantee attachment.
Commission is based on the type and combination of the securities, and it shall be borne by the applicant of guarantee.

C) Export Guarantees for Domestic Contracts
Documents required for obtaining license from Central Bank of the Islamic Republic of Iran
Note: In this form of guarantee, there is no need to obtain permission from Central Bank of the Islamic Republic of Iran for issuance of various types of guarantees up to USD 200,000.
Completing the guarantee application form on the company’s letterhead with the authorized seal and signature of the company; (an attestation of the letter is required), for presenting to the branch in which the company maintains the account,
Copies of tender documents (for tender/bid bonds) and copy of the contract or L/C and/or the work reference letter; two copies of the parts related to the contract specifications and the terms of payment (for good performance bonds and advance payment guarantees),
Approval letter issued by the Bank’s Credit Committee,

After Obtaining License from Central Bank of the Islamic Republic of Iran
- Presenting the letter of commitment by the applicant stating that in case the amount of guarantee is to be paid to the beneficiary, the guarantee writer shall provide the amount of the guarantee in foreign currency or its equivalence in Rials based on the foreign currency rate prevailing on the date of guarantee attachment.
- The value of the securities shall be specified according to the provisions of Letters of Guarantee Issuance Code and endorsement by the banks and based on the company’s capabilities, as discerned by the Bank,
- The bank’s annual commission rate for issuance of a/m guarantees is based on the type and combination of the security and it shall be on the burden of the applicant,
- In case the total amount of guarantee is deposited in foreign currency or its equivalence in Rials at the market exchange rate, there is no need to obtain permission from Central Bank of the Islamic Republic of Iran, Management and Planning Org., and Trade Development Organization as well as the Bank’s Credit Committee.
Should you need more information, please contract Foreign Currency Guarantees Department, General Department of Foreign Currency Operations based in Forsat Central Building.
Point 1:
Banks are not allowed to issue letters of guarantee for meeting foreign currency obligations for loan guarantee, any type of foreign currency facilities received from foreign resources and banks “except those that are approved by Central Bank of the Islamic Republic of Iran.”
Point 2:
Issuance of various types of foreign currency letters of guarantee, needed by non-Iranian legal and natural persons is only allowed in case of deposit of 100% of the retention bond in foreign currency, without obtaining license from Central Bank of the Islamic Republic of Iran.
Point 3:
Accepting and notifying direct letters of guarantee with respect to foreign currency documentary credits and contracts, provided out of the applicant’s foreign currency and also the direct guarantee issued by Iranian banks, branches of Iranian banks overseas and units of Iranian banks are allowed.
Telephone Lines of General Department of Foreign Currency Operations- Department of Foreign Currency Guarantees
Management  82962020


 

 

Management

82962020

Department of Foreign Currency Guarantees

82962523- 82962328-82962521

Fax

82962704-82962718-82962504

SWIFT

BKMTIRTHLGD

TELEX

212483msfxir

Address

No. 327, corner of Forsat St., Ayatollah Taleghani Ave, Tehran

 

 

 

 

 

Foreign Currency Reserve
Conditions and requirements for facilities granted out of foreign currency reserve account
In the development 4th plan in order to support and finance part of foreign currency needs of the producers and exports of the private and cooperative sectors, out of extra income gained from selling crude oil, facilities are granted within Islamic banking norms and contracts and the Codes of Practice approved by Board of Trustees of Foreign Exchange Reserve Account through opening sight documentary credits based on the goods and services import and export regulations.
Eligible Persons
Natural persons and all companies whose capital is mainly owned by private sector or cooperatives.
Authorized Sectors
Industry, mine, agricultural, transportation, export of technical and engineering services and such services as tourism and IT,
Acceptable Activities
1- All investing activities in industrial, mineral, agricultural, transportation and services (including tourism) manufacturing and entrepreneurship projects  and export of technical, engineering services by the private sectors or the cooperative,
2- Making investments to create new capacities including the purchase of equipment, machinery, know-how, and paying the expenses for installation and operation of manufacturing and entrepreneurship projects including industrial, mineral, agricultural, transportation, services as well as technical and engineering services,
3- Making investment for development and rebuilding of the existing production capacities including construction, machinery and installations,
4- Foreign exchange and income generating investment plans in hotel construction and transportation (development and renovation of aerial and marine transportation fleet); Explanation: in all above said cases, investment in the projects for energy optimization and application of Information and Communication Technology (ICT) shall have priority.
5- Investment in agricultural projects with the goal of development of exports,
6- Issuance of letters of guarantee for Iranian companies who have won international tenders,
7- Joint venture projects, as approved within Foreign Capital Attraction and Support Act,
8- Granting facilities within Supplier’s Credit to the exporters of goods and services in order to motivate and develop nonoil exports,

Foreign Currency Facilities Interest Rate
1- Generally, the interbank interest rate shall be 6-month LIBOUR+2% or (CIRR) +2% per year.
2- The Interest rate of provincial projects and less developed regions, 3 per cent,
3- The interest rate of loans with preferential conditions including shipbuilding industries (building 140-2000 MT vessels to the benefit of Iranian producers), reconstruction of textile industries and renovation of state transportation fleet (aerial, railway, road and marine) 3 percent.

Duration of Facilities
1- Maximum duration of financing of each project shall not exceed 8 years, and it includes 3 years as civil partnership (investment and operation) and the remaining 5 years as operation period (repayment).
2- Total period for less developed regions and equipment and renovation of state transportation fleet shall be allowed up to 10 years,
3- The period for using preferential facilities for the textile industry, is maximum 3 years, with the respite period of maximum one year and the repayment period of maximum 4 years after the termination of the deadline.
4- Maximum financing period for facilities with preferential conditions in shipbuilding industries shall be 12 years to the benefit of Iranian manufacturers.

The following assets and instruments shall be accepted by and at the discretion of the bank as collaterals:
1- Land
2- Machinery and equipment,
3- Stocks of listed companies,
4- Stocks of unlisted companies,
5- Bank guarantees and valid documentary credits of foreign banks in favor of Iranian applicant,
6- Collectable drafts,
7- Promissory notes of corporate managers,
8- Mine exploitation license,
9- Approved statements and definite liabilities of public executive bodies along with the approval of the beneficiary including the transfer of guaranteed resources to the bank,
10-  Private bonds,
11- Any other guarantee acceptable for the bank,

Repayment Period
1- The financial facilities used shall be repaid in 6 month installments.
2- After 3 months from the date of execution of civil partnership contract, the guarantee cost for 0.125% shall be applied to the balance of unused foreign exchange facilities.
3- The interest of facilities granted at the end of each 6-months shall be calculated for the balance of facilities used and shall be charged to the account of borrower’s obligation.
Scope of Powers of Corresponding Banks, Specialized Workgroups and Board of Trustees of Foreign Exchange Reserve Account
1- Customer should refer to the branch and present his application for receiving foreign exchange facilities out of foreign exchange reserve fund,
2- Submitting the customer’s application along with the type of loan securities to the expertise unit of related branches administration,
3- The approval of branches administration and presenting the case to General Department of Credits,
4- Preparing expertise report by General Department of Credits after obtaining the approval of price and type of machinery subject of P/I(s) presented, by certified inspection companies and/or by State Customs Offices,
5- Obtaining permission from relevant ministry by the customer,
6- Issuance of the resolution of the bank’s board of directors
7- Issuance of the foreign currency freezing notice by the Projects Foreign Currency Financing Expertise Unit- General Department of Foreign Affairs,
8- Execution of civil partnership contract between the customer and branch,
9- Preparing commercial order placement forms and presenting thereof to Department of Foreign Currency Operations in order to be sealed for allocating foreign currency out of foreign exchange reserve fund,
10- Opening documentary credit,

 

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