Iran and Russia have officially connected their interbank networks, enabling the use of Iranian banking cards in Russia’s ATM network, Central Bank of Iran (CBI) website reported on November 11.

This significant step aims to simplify financial transactions for Iranian and Russian travellers, marking a milestone in economic cooperation between the two nations. Iran and Russia have been working to strengthen their banking systems since sanctions were imposed on Russia for more than a decade. Plans are underway to address the challenges faced by businesses in both countries. 

The first phase of linking Iran’s Shetab banking network to Russia’s Mir payment network was inaugurated at a ceremony attended by the Governor of Iran's Central Bank, Mohammadreza Farzin, along with Iran’s ambassador to Russia, Jalal Kazemi, and several high-ranking banking officials.

All Iranian banks and credit institutions are required by a CBI directive to connect to Shetab. This measure has been on the CBI’s agenda since 2017 but has been repeatedly postponed for unknown technical reasons.

With this initial stage now operational, Iranian travellers can withdraw rubles from Russian ATMs. The second phase, expected by the end of this year, will allow Russian travellers to access Iranian ATMs, while the third phase will eventually permit Iranian tourists to make purchases in Russia using their Shetab-linked cards.

Farzin described the launch as a “proud step” toward reducing dependence on the US dollar in bilateral transactions and promoting regional economic integration. “By connecting the two countries’ national payment networks, we are removing electronic payment barriers and paving the way for a new era in economic cooperation,” he added.

Noushafarin Momen, CBI’s head of supervision on payment networks, confirmed that four Iranian banks had completed the required modifications to enable this service, with several others also in the process of system upgrades to join the network.

“This project is a collaborative effort involving Iran’s National Informatics Centre and a Russian technology partner, with Iran’s Bank Saderat and Russia’s VTB Bank serving as intermediaries,” she said, “Several major Iranian banks, including Bank Mellat, Bank Refah, and Bank Pasargad Iran, have joined this initiative, expanding access and support for Iranian cardholders abroad.”

“NFC-enabled ATMs across Russia now support contactless payments for Shetab-linked Iranian bank cards,” she added.

"New concepts have been created in the monetary and banking sphere between the two countries, and today, most barriers have been removed. Regarding other work, we should focus on attracting Russian tourists," said Iranian Ambassador to Russia Kazem Jalali.

This development follows Russian President Vladimir Putin's September statement about enhanced bilateral relations with Iran under Supreme Leader Ayatollah Ali Khamenei's support. The countries are working towards signing a major interstate agreement to establish strategic partnership status.

In 2023, the two central banks signed a significant agreement to establish banking ties, as both are disconnected from international interbank messaging systems such as SWIFT.

In May, Iranian Trade Attaché Rahimi Mohsen told Russian Izvestia that Moscow and Tehran were developing new settlement methods, including central bank digital currencies and digital financial assets.

Bne IntelliNews could not verify the claim by the Iranian officials, with Russian banks yet to comment on the commencement.

In the past, Iran had a similar swap deal with Turkey, which was seemingly cancelled following the re-imposition of sanctions on Iran in 2018.

In 2023, the two central banks signed a significant agreement to establish banking ties, as both are disconnected from international interbank messaging systems such as SWIFT.

Earlier that year, Iran’s SEPAM system was linked to Russia’s Financial Message Transfer System (SFPS), allowing some banks to start offering transactions to Iran or open letters of credit.

As part of the new deal, Iranian bank cards can be used to withdraw rubles from ATMs in Russia starting in August. This marks the first phase of plans to connect Iran’s Shetab interbank network to Russia’s MIR network.