Panic erupted across Tehran on October 25 after Ayandeh Bank, one of Iran’s largest private lenders, was officially declared bankrupt, leaving depositors in long queues amid fears of losing billions in savings.
The bank’s collapse, which has left it with more than $5.2 billion in losses, delivers a major shock to Iran’s fragile, sanctions-hit financial system, The Caspian Post reports via Iranian media.
The government quickly intervened, transferring Ayandeh’s assets, branches, and operations to the state-owned Bank Melli Iran.
Founded in 2012, Ayandeh operated 270 branches nationwide, including 150 in Tehran, serving millions of ordinary Iranians and small businesses. State media described the move as a “necessary restructuring” to protect depositors, but it exposed systemic problems in the banking sector, including non-performing loans, opaque lending to politically connected firms, and a property market weakened by economic isolation.
By early morning, crowds had gathered outside former Ayandeh branches, clutching account books and demanding access to their funds. Eyewitnesses described chaotic scenes, with elderly savers pushing through barriers, young professionals coordinating withdrawals via phones, and police in riot gear forming lines to prevent stampedes.
“I've spent 20 years building my savings here for my children's future,” said Reza Karimi, a 55-year-old shopkeeper from southern Tehran, who waited over four hours in the heat. “Now, everything feels like it's vanishing. How can we trust any bank after this?”
The bankruptcy is enormous: Ayandeh’s bad debts alone exceed $5 billion, or about 2 per cent of Iran’s GDP, according to local analysts. The crisis stems from aggressive lending during the 2020-2022 property boom, much of it to politically connected firms that defaulted when the market collapsed amid hyperinflation and a 50 per cent devaluation of the rial this year.
Central Bank Governor Mohammad Reza Farzin reassured the public on television that “all deposits up to the insured limit of 100 million rials [about $200] per account are fully protected” and that Bank Melli would honor larger sums through a phased payout plan. “This is not a failure of the system but a targeted cleanup to strengthen our resilient economy,” Farzin said.
The government’s response has combined reassurance with repression. While Bank Melli extended hours and added ATMs, authorities arrested several individuals accused of “spreading rumors” online that fueled panic.
International observers, including the International Monetary Fund, have urged Tehran to improve transparency, but tightening US sanctions and rising regional tensions may hinder such efforts.
For everyday Iranians already grappling with 40 per cent inflation, fuel shortages, and youth unemployment above 25 per cent, Ayandeh’s collapse is more than a financial story-it is a stark symbol of a nation on the brink.
