One of Iran’s major private banks has recently gone bankrupt, impacting the assets of over 42 million customers, which are now being absorbed by Bank Melli, a state-owned institution.

Ayandeh Bank officially declared its insolvency after accruing approximately $5.1 billion in losses and around $3 billion in debt, according to reports from Iran International.

This announcement came shortly after the Central Bank of Iran attempted, but failed, to rescue the struggling bank that had 270 branches across the country.

The situation has left over 42 million customers in a precarious position, as reported by Iran News Update.

Source: National Union for Democracy in Iran

While CBI Governor Mohammad Reza Farzin has assured that customers will have immediate access to their savings, this incident underscores the risks of relying on banks that engage in risky lending practices, operate with fractional reserves, and often require government bailouts in times of crisis.

The ongoing instability in the Iranian banking sector reflects broader financial challenges, evidenced by several other banks also facing risk of dissolution unless reforms are enacted.