Ayandeh Bank’s collapse reveals insider lending and Ponzi-like deposits, losses, and delayed oversight—shifting costs to the public and spurring demands for independent supervision, transparency, accountability, and structural banking reform.
Ayandeh Bank’s collapse has become a case study in how crony banking, weak supervision, and political protection can turn a private lender into a public liability. In early November (Aban 1404), the Central Bank dissolved Ayandeh and put it into “resolution”: Bank Melli will keep serving customers and repay depositors in stages, while the Deposit Guarantee Fund sells Ayandeh’s problem assets. In plain terms: the doors stay open—but the bank is over.
What Went Wrong
Ayandeh lent most of its money to companies tied to its own major shareholders—especially mega real-estate projects like Iran Mall and Farmanieh Mall. Those projects did not bring in cash quickly, so the bank ran short. To keep up appearances and pay yesterday’s promises, it pulled in new deposits by offering unusually high interest—effectively running a Ponzi-like cycle.
• Accumulated loss: about 550 trillion tomans ($5.5 billion).
• In 2024, some analysts said Ayandeh was “burning” about 15 billion tomans per hour ($150,000/hour)—meaning it was losing money at that pace.
• Heavy debts piled up to other banks and to the Central Bank.
A Quasi-Ponzi—In Plain Language
Imagine a bucket with a hole. Instead of fixing the hole (earning steady income), you keep pouring in new water (new deposits) to keep the level up and pay earlier promises. The moment the inflow slows—or many people ask for their money back—the level drops and the setup collapses. That is what happened at Ayandeh: it did not earn enough from its investments, so it kept chasing new deposits with big promised returns until the math broke.
The Iran Mall Trail
Between 2015 and 2017, Ayandeh issued over 35 trillion tomans ($350 million) in big loans to Iran Mall, then ended up taking 98% of the mall’s shares instead of getting cash back. Later, those shares were reportedly shuffled among shell companies—moves that made the books look better without solving the cash problem. In December 2020, Ayandeh even tried to sell Iran Mall for 85 trillion tomans ($850 million)—a price critics called unrealistic. Many experts say decisive action years earlier could have avoided tens of trillions of tomans in extra losses.
What Officials Are Saying
Judiciary chief Gholamhossein Mohseni-Ejei criticized the delay in handling Ayandeh, noting that Central Bank experts had concluded as early as 2023 that the bank was beyond repair. He also warned that other banks face serious balance-sheet gaps. The Central Bank says:
• Bank Melli will serve customers and handle staged repayments.
• Ayandeh’s bad and illiquid assets go to the Deposit Guarantee Fund to manage and sell.
• Bank Melli is not taking on Ayandeh’s giant losses.
Officials also say legal cases will target those responsible, though the public list of top debtors remains limited.
Who Benefited and Who Pays
Economist Hossein Raghfar says about 130 trillion tomans ($1.3 billion) in collateral-free loans went to only 61 people. A “collateral-free” (unsecured) loan means no property or asset was pledged as security—highly risky, especially when given to insiders. Raghfar argues that this money could have funded about 120 specialty hospitals across Iran.
Other estimates say Ayandeh’s losses were about 450 trillion tomans ($4.5 billion), and its debt to the Central Bank about 300 trillion tomans ($3.0 billion)—much of it tied to unsecured lending. For ordinary people, this is not abstract. Retirees who relied on monthly interest now worry about rent and medical bills. Their basic questions: Will public money fill the hole? Why are the biggest borrowers still unnamed? How did a bank that advertised nonstop on state TV collapse so fast?
The “Liquidity Drain” Argument
Some analysts say authorities tolerated Ponzi-like banks and flashy but illiquid projects because they soak up excess cash. When people’s money is locked in a mall project or a troubled bank, it is not spent in shops—so less money circulates, and price pressure eases. When the bubble bursts, “paper wealth” (values written on balance sheets, not cash in hand) is wiped out, which also lowers inflation pressure. But the public takes the loss, and trust in banks erodes. Whether or not this was a deliberate policy, the result looks the same: wealth moves upward, and faith in the system falls.
What Happens Next
• Depositors: Bank Melli is servicing accounts. How quickly people are repaid depends on how fast the Deposit Guarantee Fund can sell assets. Timing is the main worry.
• Prosecutions: The judiciary promises action against offenders, but few big names have been publicly confirmed.
• Systemic risk: Officials admit Ayandeh’s problems were known for years and were not unique—so more bank “resolutions” are possible unless the rules change.
The Root Solution: Structural Transformation, Not Band-Aids
Experts point to four practical steps:
- Real Central Bank independence with firm, rules-based supervision.
- Full transparency: publish mega-debtors and their networks.
- Ban insider lending and remove conflicts of interest in bank governance.
- Real accountability: penalties that actually bite for delinquent executives and big defaulters—connections or not.
Small fixes will not work. Only structural transformation—resetting incentives, transparency, and enforcement across the banking system—can keep the next private lender from becoming the public’s problem.
