MELLI AND MELLAT : BANKRUPTCY FOR IRANIAN BANKS!

I am anonymous, because that's safer for me.

It's been a while since I've been able to post but I wanted to share with you all news of rumours about a run on one of Iran's largest banks Bank Melli Iran - known here as Bank-e Melli.

Today (26 January 2010) I have an update and more information for you - the banking crisis extends to at least two major banks - Melli and Mellat.

Update and more information - Tuesday 26 January 2010

• The government has told the banks that it has no money to inject into banks!
• Riots at the Banks in Iran
• Mousavi, Mousavi chants at the Bazaar

Two banks (Melli and Mellat) are planning to withhold funds from people in order to pay back their loans to bigger investors before March. The excuse they are using is that in order to do their end of the Iranian year calculations, they need to close people's accounts for a while!

The City of Tehran

This is an excerpt of the news from Tehran a few days ago before the news was spread by word of mouth and the subsequent rush by the people to the above mentioned banks in order withdraw their funds.

Yesterday around Rug Bazaar of Tehran, a big crowd had gathered and the number of people who were demanding to withdraw their money was increasing by the minute.

At 11:30 am the accounts booth announced that it was out of cash and that it was only able to issue inter-bank notes but the majority of people objected. The head of the branch then announced to the people that it's only a rumor that the bank is going bankrupt and that there was no need to empty their accounts but he was faced with customers who were demanding their money. The verbal attacks got louder and finally the security stepped in which made the situation worse.

A few minutes later the special guard units entered the branch and beat people up in the worst possible way using batons and closed the door on people. The beaten-up customers then started chanting "Mousavi, Mousavi" outside the bank.

A few of the surrounding shops upon hearing the chants closed down their stores and the Rug Bazaar turned into a security zone and anti-riot police situated itself around the bank.

Since Saturday news has leaked out about secret meeting of the government regarding the banks going bankrupt. In these meetings Ahmadinejad, the head of Central Bank and also a few heads of government banks handed a secret report about the bank crisis to Ahmadinejad and the two aforementioned banks (Melli and Mellat) announced their bankruptcy and asked the government for urgent help.

The news about this meeting quickly spread within the upper echelon of Tehran's Bazaar and, following this news, owners of the larger commercial firms decided to withdraw their cash from these two banks. This coincided with the decision by the banks to not allow withdrawals over $15,000 and the big investors started using the back door technique of using bounced checks to get around this rule. (Bounced checks need to be paid by law!)

Since last Friday people have been text messaging each other about the bankruptcy of the two banks of Melli and Mellat.

In the city of Isfahan

The Melli bank branches in Isfahan was also faced with a rush of people demanding to withdraw their money. At Chahar-Bagha and 33-Pol branches there were long lines and the presence of security forces inside the bank branches of Melli Bank shows how much the regime is afraid of riots at the banks. At 12 pm Chahar-Bagh branch ran into cash problems and people who were standing in line for hours were sent home and the bank doors were shut. This triggered off people chanting outside the banks.

Marand, Iran

People in Marand were confronted with bank officials saying:

"We have no money to pay"
"We need to wait until a customer deposits cash"
"Come back at 2 pm"

People stood in lines until 2 pm only to realize there was $500,000 set aside for a particular person! The protests began and people began to clash with the bank's security personnel and it turned physical. During the melee some people began helping themselves to cash and the bank alarms went off.

The Government's Version - Or, the propaganda!

Not surprisingly, another version of the above news has been printed by official news agencies:

Sadeghieh, Tehran

People clash with police at a Melli bank branch which causes injuries to one of the bank customers and the closing down of the bank. People had gone to the bank from early morning hours to withdraw their money only face empty vaults. People began shouting and demanding their money and were trying to cash their checks but the officials of the said branch were unable to respond even from early morning hours due to lack of funds.

The bank employees blame bigger customers who had withdrawn hundreds of thousands of dollars in cash from the bank last Saturday. Other branches faced the same problem and in most branches the bank officials had asked customers to either use inter-bank notes or to wait until funds arrive from the central branch. But after half hour, instead of funds arriving, the security forces arrived and clashed with people inside the branches.

The anti-riot police ordered people to leave the banks which was met with resistance by people. In Sadeghieh branch one of the bank officials threw his pencil holder at a customer who happened to be a middle aged woman. Out of fear of retribution by angry crowd, he then started cursing at the regime officials in a loud voice. The middle aged woman was then taken to a hospital by people for head injuries. The bank official had a name tag: "Ebrahim Ghorani".

They were finally able to kick people out of the banks and close the doors. The extent of lack of funds was such that the head of a branch had ordered bank employees to empty the cash counting machines!

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Original post - Monday 25 January 2010

People say that this bank is going to close down its branches on Wednesday 27 January 2010.

A friend told me this morning that people are rushing to BMI branches to withdraw their money.

This may be "just a rumour", but people are taking it seriously!

Today in Tehran I saw people with BMI cards in hand at every ATM I passed. They are asking:

What if BMI hasn't got my money next week?