Turkiye revokes Bank Mellat's Istanbul operating licence amid financial stability concerns

Turkiye has revoked the operating licence of Bank Mellat's central branch in Istanbul, according to a decision published in the country's Official Gazette. The move affects the Iranian lender's Istanbul operation and was announced by the Banking Regulation and Supervision Agency, known as the BDDK. The regulator said the branch's continued operation was judged to pose a risk to depositors' rights and to the security and stability of the financial system.

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The decision was published on Saturday and states that the licence of "Bank Mellat, Head Office in Tehran, Istanbul Turkey Central Branch" has been withdrawn. No operational problems were cited in the notice, and the Turkish authorities did not refer to any specific incident at the branch. The notice also did not mention the sanctions history surrounding the bank, focusing instead on domestic banking-law grounds for the revocation.

Bank Mellat has faced years of Western sanctions over allegations that it was linked to Iran's nuclear programme. Those sanctions were lifted under the 2015 nuclear agreement between Tehran and world powers, but the United States withdrew from that deal in 2018 and reimposed sanctions on Iran. Bank Mellat was later hit by further US and Gulf sanctions in 2019 after being named among entities linked to Iran's Islamic Revolutionary Guard Corps.

The Istanbul licence revocation therefore comes against a wider backdrop of long-running pressure on Iranian financial institutions. The timing is also notable because it follows fresh US sanctions earlier this month on a Turkish investment bank and two subsidiaries over alleged ties to Iran. In that case, the US Treasury accused Golden Global Yatirim Bankasi Anonim Sirketi of facilitating transactions for the Islamic Revolutionary Guard Corps-Qods Force and of helping the Iranian government move funds internationally.

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While the Turkish notice on Bank Mellat did not cite those measures, the sequence of events highlights continuing scrutiny of financial links involving Iran and institutions operating in Turkiye. Bank Mellat's Istanbul branch had been one of the bank's visible footholds in Turkiye, a country that has maintained commercial and financial ties with Iran despite periods of international sanctions pressure. The BDDK's action shows how domestic regulators can use banking-law powers to act on perceived systemic risk even when they do not publicly detail the underlying concerns.

It also underlines the sensitivity of cross-border banking relationships involving Iranian institutions, particularly when sanctions compliance and financial stability are both in view. What remains unclear is whether the bank will challenge the decision or whether any customers or counterparties in Turkiye will be affected by the closure of the branch. The notice did not set out a timetable for winding down operations or explain whether any assets or accounts are being transferred.

The next developments to watch are any response from Bank Mellat, further clarification from Turkish regulators, and whether the move prompts wider scrutiny of other Iran-linked financial links in the country.

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