Bank Keshavarzi has played a key role during the past decade in realizing its objectives for providing the credits needed by the agriculture sector by relying on 70 years of experience and adopting a new approach for mobilizing resources as the sole specialized financial institution in the Iranian agriculture sector, which accounts for an average of more than 60% of the sector’s financing. In other words, instead of relying on the government’s financial resources, Bank Keshavarzi pursued to establish a sustainable flow of agricultural credits through financial brokerage by relying on mobilization of deposits and played a great role in developing rural financial markets.

For example, after adopting the new approach in the 1990s the bank’s payments to the agriculture sector increased more than fourfold through increasing deposits and other mobilized resources including capital increase, which played a decisive role in exploiting the sector's existing capacities and creating new production capacities. Also, the share of Bank Keshavarzi deposits from total deposits within the banking system increased from about 0.9% in 1991 to 6.3% in 2002, which indicated an increased share of the bank in financial markets and the banking network in comparison to a decade before. Internal performance of the bank is in favor of increased financial independence of the bank; so that, the ratio of balance of facilities and balance of deposits to total liabilities has increased from 7.06% to 28% and from 15.8% to 53%, respectively, during 1991-2002.

In addition to the above efforts and in view of the necessity of providing the resources needed for sustainable growth and development of the agriculture sector, the bank succeeded to increase its capital through the necessary follow-ups and contributions of the concerned officials as well as the approval of the Islamic Consultative Assembly at two junctures, namely the concluding months of the Iranian calendar year 1379 (early 2001) and early 1380 (2001-02). As a result, the bank’s capital increased to more than 2,700 billion rials and more facilities were provided for financing new investments and better use of existing investments in the agriculture sector.

Development and efficiency of monetary and financial institutions of a country and their correct performance will lead to development of financial markets and developmental measures taken by banks as the main player in the monetary and capital markets directly affects and changes the financial sector. By relying on its new policies for mobilizing resources and providing new services, Bank Keshavarzi is moving toward universal banking. These efforts that have taken place through attention to modern banking standards, have led to great achievements for the bank. Ranking 212 among 1,000 tops banks of the world in 2002 by the credible Banker journal, which is published by the Financial Times Institute, is a great honor for Iran’s Bank Keshavarzi which indicates the success of the measures and the new approaches taken during the past decade, on the one hand, and proves the heavy responsibility shouldered by Bank Keshavarzi to raise that ranking, on the other. These efforts and achievements will undoubtedly lead to the development of the financial sector and its efficiency.

The most important measures taken by the bank in this regard include:

1.   Conglomerate Establishment:

A)  Establishing an agriculture investment banking as part of agricultural financial holding to direct investments and encourage entrepreneurs to create jobs in the agriculture sector;

B)  Establishing an agricultural and livestock insurance fund and turning it into a specialized institution. The fund was established by Bank Keshavarzi after the approval of the Agricultural Products Insurance Law in 1983 to support agricultural and livestock producers. It covers various agricultural and horticultural products, livestock and poultry, honeybees, silkworm, cultured aquatics, and natural resources. The fund also aims to insure production factors.

C)  More effective presence in international banking and developing forex activities. Bank Keshavarzi has paved the way for the development of its forex network and international banking in the agriculture sector through opening forex branches across the country. Presenting various kinds of forex services including opening import and export documentary credit lines, issuance of forex drafts, issuance of bilateral bank guarantees, opening forex deposit accounts as well as forex letters of commitment for exporters and so on, are among Bank Keshavarzi’s activities in this field. In addition to the above services, the following measures have been taken to promote international banking:

§       Efforts to join the Reuters Interbank Network in view of the prevalence of interbank dealings;

§       Taking measures for establishing a $10 million credit line by the Islamic Development Bank (IDB);

§       Carrying out affairs related to the Asia-Pacific Rural and Agricultural Credit Association (APRACA);

§       Interacting with the United Nations Food and Agricultural Organization (FAO) as well as the International Fund for Agricultural Development;

§       Connecting Bank Keshavarzi to the SWIFT network (Society for Worldwide Interbank Financial Telecommunication);

§       Establishing purposeful agency relations with foreign agencies and foreign banks;

D)  Bourse (Commodity and Stock Exchanges)

Bank Keshavarzi has become active in the commodity and stock exchanges for some time now in order to diversify its investment portfolio and help develop the capital market. Major measures taken in this regard include:

a. Dealing stocks at 30 selected branches across the country;

b. Purchasing stocks and increasing financial assets of the bank;

c. Contributing to making agricultural goods bourse operational and accepting settlement of transactions;

d. Publishing certificate of deposit capable of being traded on the stock exchange.

2.   Modern Banking Services, Mechanization of Branches and Electronic Banking

The success of Bank Keshavarzi in recent years has been owed to providing new services and introducing modern banking projects. In fact, Bank Keshavarzi has taken great strides during recent years for mobilizing resources and providing modern banking services as well as implementing new projects, a summary of which follows:

Completing the bank branches network, Zeinab Kobra (AS) Plan, Iran Plan, Touba Plan, establishing interest-free deposit account special to agriculture, Atiyeh (Future) Investment Deposit, increasing the number of online branches to 900, fax check, children and young adults bank plan, talking information system, telephone bank and telephone banking services, the plan for dividing and transferring long-term deposits, Mehr Card (debt and credit), Mehr current account plan, participating in banking information exchange network (Shetab), green communications center, special supervisors plan, the plan for developing rural housing, development and equipment of branches to Mehr centralized system, establishing a bilingual website at the web address: www.agri-bank.com, intelligent queuing system to improve facilities used for servicing customers in 180 branches across the nation, sending customers’ bills through email or through written messages on mobile phones, and so on.

Conclusion: Although domestic financial institutions and institutes have taken great strides in line with their own development, we are still far from an optimal and advanced financial sector. For example, challenges facing the country’s financial system in case of joining the World Trade Organization and the necessity of observing international standards in domestic financial sector would require many preliminaries. Therefore, the necessity for the development of such financial and monetary institutions and institutes becomes more urgent. Of course, existing potentials of the country’s financial sector indicate enough capability and power for presence in the international markets.

International Department 

Tel: (+9821) 825 01 35
Fax: (+9821) 826 23 13
Telex: 212058 ADBI IR
swift: KESHIRTH
E-mail: info@agri-bank.com
Web: www.agri-bank.com