The Central Bank of Iran (CBI), also known as Bank Markazi, officially the Central Bank of the Islamic Republic of Iran (Persian: بانک مرکزی جمهوری اسلامی ايران, romanized: Bank Markazi-ye Jomhuri-ye Eslāmi-ye Irān; SWIFT Code: BMJIIRTH) is the central bank of Iran.
Established under the Iranian Banking and Monetary Act in 1960, it serves as the banker to the Iranian government and has the exclusive right of issuing banknote and coinage. CBI is tasked with maintaining the value of Iranian rial and supervision of banks and credit institutions. It acts as custodian of the National Jewels, as well as foreign exchange and gold reserves of Iran. It is also a founding member of the Asian Clearing Union, controls gold and capital flows overseas, represents Iran in the International Monetary Fund (IMF) and internationally concludes payment agreements between Iran and other countries.
The first attempt at introducing paper currency in Iran occurred during the Mongol Ilkhanate of the 13th century CE. The innovation, developed in Song Dynasty China, did not take hold in Iran, and paper currency did not return to Iran in any significant manner for several centuries.
In 1889, the British-owned Imperial Bank of Persia (Bānk-e Šāhī) was founded and it was given the exclusive right to issue bank notes in Iran. In 1890 it introduced the first bank notes in Iran, ranging from 1 to 1,000 tomans. The bank did not do much to strengthen the Iranian capital formation or support then-currency of Iran, qiran.
To compete with the British bank, Imperial Russia also opened the Russian Loan and Development Bank. Polyakov‘s Bank Esteqrazi was bought in 1898 by the Tzarist government of Russia, and later passed into the hands of the Iranian government by a contract in 1920.
The first state-owned Iranian bank, Bank Melli Iran was established in 1927 by the government of Iran. On 30 May 1930, it took the responsibility to function as Iran’s central bank, and took the rights of the Imperial Bank for £200,000, while it acted as a commercial bank at the same time. The bank’s primary objective was to facilitate government’s financial transactions and to print and distribute the Iranian currency (rial and toman). For more than three decades, Bank Melli Iran acted as the central bank of Iran and was charged with the responsibility to maintain the value of Iranian rial. In 1955, the bank was given the responsibility to supervise the national banking system.
In August 1960, the Iranian government established the Central Bank of Iran (CBI) and separated all central banking responsibilities from Bank Melli Iran and assigned it to the newly-formed central bank. Scope and responsibilities of the Central Bank of the Islamic Republic of Iran (CBI) have been defined in the Monetary and Banking Law of Iran (1960).
The Central Bank of Iran was renamed to “the Central Bank of the Islamic Republic of Iran”, and Iran’s banking system adhered to the new Islamic rules that prohibit earning or paying interest in 1983.
CBI maintains a museum of historic and ancient jewelry owned and used by the ex-kings of Persia. This museum houses the Imperial Crown Jewels and is one of the most appealing tourist attractions in Iran.