Last week, an Iranian bank with more than $7 billion in debt dissolved and merged into a state-owned bank—an action that effectively transfers the burden of massive banking corruption onto the government’s shoulders. According to Central Bank officials, Bank Ayandeh owes about 7.500 quadrillion rials, two-thirds of which it owes to the Central Bank and the rest to public depositors. This figure amounts to more than 2 percent of Iran’s economy. Although the bank is private in name, it is controlled not by real capitalists but by regime figures and officials, who block oversight and accountability through their political connections.
The government has now merged Bank Ayandeh with state-run Bank Melli, meaning that the public must shoulder its enormous debts. Yet, Bank Melli itself has more than $400 million in current liabilities. Ultimately, Bank Ayandeh’s massive debt has landed on the government, which—as usual—will cover it by borrowing even more from the Central Bank. This will inflate liquidity and drive up prices as more money is printed, leaving ordinary Iranians to shoulder the cost of Bank Ayandeh’s collapse from their own pockets.
Bank Ayandeh’s massive debt has landed on the government, which—as usual—will cover it by borrowing even more from the Central Bank.
An Iranian social media user wrote on X that “Bank Ayandeh’s debt to the Central Bank amounts to 55 million rials (over $50) for each citizen.” That is one-third of an ordinary Iranian’s monthly income. Iranian economist Yaser Jebraeili wrote on X that merging Bank Ayandeh with Bank Melli, without prosecuting those responsible and seizing the assets tied to the bank, would amount to nothing more than “nationalizing the losses.”
To grasp the magnitude of this issue, note that the combined debt of all twenty-six Iranian banks to the Central Bank stands at about $7 billion—and Bank Ayandeh alone accounts for 65 percent of that total. For years, the bank faced warnings from financial experts about capital inadequacy and massive liabilities. Yet remarkably, more than 60 percent of Bank Ayandeh’s debt to the Central Bank (around $3.13 billion) stems from borrowing that took place in the final months before its dissolution.
The merger of Bank Ayandeh into Bank Melli without judicial investigation or arrests of those responsible for creating this mountain of debt has stunned Iranians online. Iranian journalist Ehsan Bodaghi wrote on X: “Just dissolution? According to some estimates, about 40 percent of the banking system’s debt to the Central Bank—and 5 percent of annual inflation—comes from Bank Ayandeh. Isn’t this a case of crimes like disrupting the national economy, money laundering, and misuse of public funds? Holding a public trial is the very least the people deserve in response to the actions of this bank.” The government and the Central Bank, fully aware of the bank’s insolvency, transferred huge sums of money to the bank, which, in turn, loaned it to influential borrowers. Activist Vahid Ashtari, who has been arrested several times for exposing corruption cases, wrote on X that he had warned about the corruption at Bank Ayandeh five years ago. “The judge told me, ‘Who are you to talk about the need to dissolve a bank?’” he recalled.
“Holding a public trial is the very least the people deserve in response to the actions of this bank.”
Central Bank data show that at least fifteen of the twenty largest debtors in the Iranian banking system are state-owned entities or companies affiliated with the Islamic Revolutionary Guard Corps. The chief executive officers of the remaining five companies also turn out to be well-connected insiders of the Islamic Republic and favored figures within the Revolutionary Guard, indicating that these firms, too, operate under the Guard Corps’ effective control behind the scenes.
On October 24, 2025, Central Bank deputy Farshad Mohammadpour announced that “the bank’s latest overdraft figure was about 3.3 quadrillion rials ($3.3 billion).” He did not specify exactly when this overdraft occurred, but the Central Bank’s latest report shows the bank’s outstanding debt stood at 1.8 quadrillion rials in March 2025—meaning that $1.5 billion in borrowing took place just in the last few months.
Over the past six months, the U.S. dollar has appreciated by 35 percent against the Iranian rial. In simpler terms, 3.3 quadrillion rials were worth about $4 billion six months ago but less than $3 billion today—implying that the ultimate borrowers, the government and the Islamic Revolutionary Guard Corps, effectively gained more than $1 billion in the process. Such governance practices and such an enormous scale of state-sponsored embezzlement may be unique to the Islamic Republic; they are not a one-time occurrence but show the impunity which regime insiders continue to feel.
