Islamic Republic of Iran: Bank Keshavarzi, the Agricultural Bank
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.