Per the deal, 52 branches of Iranian banks and four unnamed foreign banks will use Iran's local interbank telecom system, known as SEPAM, to connect with 106 banks using Russia's System for Transfer of Financial Messages or SPFS, the website of the Central Bank of Iran said.
Iran's Shahr Bank and Russia's VTB Bank will be involved in the related pilot program and other lenders will join gradually.
The agreement was signed at CBI by the deputy head for international affairs, Mohsen Karimi, and Vladislav Gridchin, on behalf of Russia’s central bank.
Speaking on the sidelines of the signing ceremony, Karimi said the deal is a big step forward in implementing counter-measures against banking sanctions between Iran and Russia. "The two local interbank systems cannot be sanctioned and their infrastructure are not controlled by western governments," he was quoted as saying.
"The contract is the first step outlined in the join action plan of banking cooperation signed last year by the two central banks. This will pave the way for all Iranian banks to interact with Russian lenders.”
Gridchin expressed the Russian side’s interest in enhancing ties with Iran’s banks noting that the agreement will help promote bilateral trade and a defining feature is that it cannot be sanctioned.
SPFS is the Russian equivalent of the SWIFT financial transfer system developed Russia’s central bank. It is in place since 2014 when the United States government first threatened to disconnect Russia from the SWIFT system.
SEPAM (a Persian acronym) currently functions as a venue through which interbank transactions are conducted electronically. It is said to be capable of being connected to foreign banks.
Cooperation between the two countries gained momentum last year amid western sanctions on Moscow and Tehran. Throughout 2022, both sides reached several agreements to expand cooperation, from barter supply deals for Iranian turbines, spare parts and aircraft equipment, to contracts for the joint construction of gas pipelines.
Earlier this month, the Central Bank of Iran hosted a Russian delegation headed by Igor Yevgenyevich, aide to the Russian President Vladimir Putin. The two sides discussed ways to further cooperation in banking and monetary affairs.
Speaking at the meeting Mohammad Reza Farzin, the new CBI governor, expressed Tehran’s readiness to build banking ties with Russia.