Banks’ rigid regulations hindering Iranian investment – Scicluna

Malta is being denied investment from Iran because banks are refusing to open accounts for Iranian businessmen, finance minister Edward Scicluna warned.

“Iran is an enormous country that has now started to open its doors to the world,” he said. “However, Maltese banks are refusing to open accounts for people, simply because they are from Iran. We must ask ourselves whether we want foreign investment or not.”

He said that Maltese banks will hold a meeting with the Institute for Financial Services Practitioners, so as to understand their concerns. 

Scicluna was answering questions from the press, in light of Prime Minister Joseph Muscat’s recent call on banks to loosen their lending practices.

He said that international banks’ “know your customer” regulations to identify their clients’ statuses have grown so rigid that investors from the Middle East and North Africa are instantly being branded as high-risk.

While he praised Maltese banks’ conservative lending approach for saving Malta from the 2008 financial crisis, he warned that “the pendulum has now swung too far in the opposite direction”. 

“Banks are now scared of loaning money to an iGaming company because there is a 1% chance that it could be a rotten apple,” he said. “The government isn’t going to force the banks to do anything, but we are speaking out on behalf of the aggrieved industrial community. Stifling an economy from a credit supply is like strangling a person.”