Iran, Russia Agree on SWIFT Substitute

With Iranian banks and some Russian banks unable to use SWIFT, the central banks of the two countries signed an agreement on 29 January 2023 to link their countries’ interbank communication and transfer systems in an effort to facilitate bank transactions with each other.

“Under the deal, the national banking messaging systems of the two countries were connected, making it possible for all member banks of the national banking messaging system of Iran to exchange banking messages with all banks in Russia,” said Central Bank of Iran Deputy Governor Mohsen Karimi to Fars news agency.

The system allows financial institutions in the two countries to open letters of credit or process money orders and bank guarantees. “This means they do not need the SWIFT international messaging system for payments”, according to remarks attributed to Karimi in Iran’s Press TV news service.

Karimi said that the united national messaging systems will enable about 700 Russian banks to exchange financial messages with Iranian banks and another 106 non-Russian banks (unnamed) from 13 other countries to connect with the system and have financial exchanges with Iranian banks.

According to the CBI, as referenced by Press TV, 52 branches of Iranian banks and four unnamed foreign banks will be able to use Iran’s local interbank telecom system (SEPAM) to connect with 106 banks using Russia’s “system for transfer of financial messages” (SPFS).