Major Iranian bank goes bust as economy reels under inflation and sanctions

Iran declared that Ayandeh Bank, one of the country’s largest private banks, had collapsed due to massive bad debts, dealing another blow to an economy reeling under inflation, mismanagement, corruption and US president Donald Trump’s ‘maximum pressure’ campaign aimed at suffocating the Iranian economy.

‘The Central Bank used all its powers to resolve the imbalance of Ayandeh Bank, but that was not enough to resolve the problems of this bank,’ official Iranian media quoted Central Bank Governor Mohammadreza Farzin as saying.

Hamidreza Ghaniabadi, an official at the Central Bank of Iran, cited ‘bad debts’ as the cause of bankruptcy.

Less than 5% of Ayandeh Bank’s depositors held 95% of total deposits, while 95% of depositors held less than 5% — debts that were not repaid – according to Judiciary Chief Gholamhossein Mohseni Eje’i. ‘Some deposits were made with funds that were not legally permitted for deposit, and some were fictitious,’ he said in remarks at the Supreme Judicial Council meeting on Sunday, on which he did not elaborate.

The Central Bank’s High Board formally approved Ayandeh Bank’s dissolution on 6 October. State-owned Melli Bank has absorbed the bank’s assets, with all Ayandeh Bank depositors becoming Melli Bank depositors as of 23 January 2026.

Founded in 2012, Ayandeh Bank had a network of 270 branches across the country, including 150 in the capital Tehran alone, but had been crippled by debt with accumulated losses amounting to approximately $5.2 billion and roughly $2.9 billion in debts, according to the ISNA news agency. Eje’i said those losses should have been ‘stopped as soon as possible’.

Farzin said last week the bank was ‘a symbol of the inefficiency and imbalance of the banking system in the last two decades’, and ‘Despite all efforts, it was not possible to place this bank on the path of reforms intended by the Central Bank’.

Ayandeh Bank had been behind lavish projects such as the immense Iran Mall shopping complex in Tehran, which includes an ice rink and cinemas.

The bank collapse comes as Iran’s economy faces simultaneous hyperinflation and severe recession, with the rate of the rial reportedly plummeting to 1.1 million per US dollar on the black market and  inflation estimated at 40% to 50%, eroding household purchasing power.

Earlier this month, Iran’s parliament approved legislation to remove four zeros from the rial, launching a five-year currency reform as the national currency plunges to record lows amid reimposed UN sanctions and hyperinflation that has turned everyday transactions into exercises in counting millions.

The United Nations reimposed tough sanctions on Iran in September after months of tense diplomacy aimed at reviving nuclear talks derailed since June, when Israeli and US forces bombed Iranian nuclear facilities. The sanctions are a ‘snapback’ of measures frozen in 2015 when Iran agreed to major restrictions on its nuclear programme under a deal that Trump withdrew from in 2018 during his first term.