Case study

Islamic Republic of Iran: Bank Keshavarzi, the Agricultural Bank

Reform and restructuring of Bank Keshavarzi
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This paper assesses the progress of Bank Keshavarzi (BK), Iran, from its inception in 1993. BK is a government owned agricultural bank with a twofold mission: acting as a development bank implementing government objectives and a commercial bank maximizing shareholder value.

Over the years, BK has transformed from a credit fund to a financial intermediary, with self-reliance, expansion of outreach and profitable operations as top priorities. Key reform processes include:

  • Becoming a full-service bank;
  • Making use of new opportunities for modernization of operations and services;
  • Strengthening autonomy;
  • Implementing strategic reform plans geared to good governance, efficiency and profitability;
  • Taking first steps towards privatization;
  • Getting rid of accumulated losses;
  • Reforming corporate culture from a hierarchical structure into a flat organization;
  • Diversifying portfolio to finance farm, off-farm and non-farm activities.

Priority projects that would help turn BK into a self-reliant, profitable universal bank with a wide outreach to rural as well as urban areas include:

  • Policy dialogue towards sustainable Islamic banking;
  • Banking with solidarity groups, focusing on educated young adults;
  • Taking the bank to the people.

About this Publication

By Seibel, H.