By: Mir M.Hosseini
Originally known as The British Bank of the Middle East, The Imperial bank of Persia was established in 1889 with a royal charter from Queen Victoria, very unusual for an overseas bank at the time. Iran's banking system, including issuing banknotes had been managed by the British for over 40 years. Inauguration of the Imperial Bank of Persia was probably a tactical move against Anglophobia which was on the rise everywhere in the world.
The bank's headquarters was situated in a corner of the Sepah square. Years later, Bank Bazargani was the first Iranian private bank which operated in the same building.
Bank Melli, the first Iranian national bank of Iran was officially Inaugurated on Sep, 11, 1928 by a law which had been passed by the sixth Majlis. The seventh Majlis gave Bank Melli the authorization to issue currency. But the influential British protested. They were compensated with an amount of 200,000 Sterlings and were given the right to keep their bank and its branches across Iran.
On May, 27, 1930, Iran started issuing her own bank notes.
During disputes regarding Nationalization of Oil, after British hostilities, the Imperial Bank Of Persia was closed in 1952 by Mosaddegh's order.
After 1979 revolution, all banks were nationalized. Islamic Banking was presented and tried by idealists for a while. Amazingly, usury has become legal under the Islamic Republic and is a dominant factor in Iran's financial system today.