Iran's revolutionary government took over the country's beleaguered banking industry today in a move some economists believe could herald a wave of nationalization of private industrial and commercial interests here.
Iranian banks have been in shambles since the revolution earlier this year, when an estimated 1,400 branch offices were destroyed or damaged by rioters and when strikes paralyzed the entire economy.Moreover, many bankers have fled the country and transferred capital abroad.
In New York, analysts reacted calmly to the news, suggesting that the takeover was likly to help Iran without doing any damage to U.S. or other foreign interests.
The first official nationalization since the Islamic revolutionary government took over last February was announuced by Prime Minister Mehdi Bazargan, who said that the takeover of 14 banks with foreign shareholdings would "safeguard people'savings and assets."
"We respect private property," he said, "but in view of the undesirable and unprofitable conditions in the banks we deemed it necessary to nationalize them in order to protect national rights and wealth and get the wheels of the economy moving."
Bazargan made no mention of compensation of foreign and domestic shareholders. U.S. financial analysts pointed out that Iran is still paying off its debts contracted in the U.S. capital markets and that they assume that the U.S. banks with exposure in Iran will be compensated fairly.
Of Iran 's 37 banks, the 10 largest were already wholly owned by the government and 27 were privately owned. Apart from the Russo-Iran Bank, which was entirely owned by the Soviet government, 13 banks had foreign minority interests worth about $160 million. Chase Manhattan, with 35 percent interest in the International Bank of Iran, had the greatest exposure here. Chase is said to be pleased by the government move, hoping that fair compensation will enable it to pull out without lossesfrom the venture, which already is in difficulty.
Other U.S. banks with smaller exposure include the Bank of America, Continental Illinois, Citibank, the Mellon and first Boston.
Iran's foreign debt totals about $5 billion, of which U.S. banks are owed more than $2 billion by Iranian government and private institutions.
There was no immediate word on the system of interest rates. Following Ayatollah Khomeini's dicates against usery, authorities are in the process of forming an "Islamic bank" that will ban interest in favor of a complicated system of investment and "profit sharing."
Earlier indications that a nationalization of the banking system was being considered came in April when a draft of Iran's new constitution was leaked to a Tehran newspaper. One of its provisions called for nationalized banking and insurance institutions.
Bankers and businessmen said the government's intentions were still too hazy to judge what the effect of the nationalization will be. But they noted that there were political motives for the decision: many of the major shareholders of the private banks had ties with the ousted government ofShah Mohammad Reza Pahlavi.
"It's probably a trend of the times," a Western banker said of the nationalization. "It looks good politically."
Business sources said they excect the banking nationalization to result in greater government control on foreign trade, and probably lead to take overs in other sectors. The sources said insurance firms, petrochemical industries and oil ventures are other likely candidates for nationalization in the near future.
Most major industries in Iran are already government owned, notably the oil industry, which was nationalized in the early 1950s. However, four joint venture oil companies formed subsequently still produce oil offshore in the Persian Gulf.
Post financial correspondent James Rowe reported the following from New York :
Several analysts on Wall Street said that the takeover was likely to help Iran without damaging U.S. interests. They said that substantial amounts of currency have been leaving Iran this year and that some smaller banks have been having liquidity problems as a result.
Analysts noted that direct foreign exposure in Iran was limited and that several U.S. banks have already reduced it by selling their interests to Iranian banks. Citibank, for instance, had owned 35 percent of Iranian Bank but reduced it to 5 percent in 1978 and to under 2.5 percent today.