The Central Bank of Iran announced the merger of all military-owned banks into Sepah Bank. The merging banks are Ansar, Ghavamin, Hekmat Iranian, Mehr Eghtesad, and Kowsar Financial Institute.

Ansar and Mehr Eghtesad banks belong to the Islamic Revolutionary Guard Corps (IRGC), Ghavamin to the law enforcement, Hekmat Iranian to the army and Kowsar belongs to the Ministry of Defense.

 Central Bank described this decision as “an important step in protecting the stability and health of Iran’s banking system.”

According to the announcement, a plan has been designed to decide how to deal with the shareholders.

It is not clear whether this merger will lead to denying the military from owning shares in the banking system or not.

Organizing the activities of military-owned financial institutions and better use of resources have been announced as the reasons for the merger.

The merger of banks has a history in the Islamic Republic. After the revolution, Tejarat Bank was created from the merger of 12 banks and Mellat bank was formed from the merger of 10 banks.

The current merger is said to take almost five years to complete. With over 5000 branches and 24 million customers, these institutions have played an important role in Iran’s economic structure in the past decade.

Abdollah Ramezanzadeh, an Islamic Republic reformist tweeted that the cost of this merger is over 70 trillion rials (over 5 billion dollars) which will be paid from the people’s pocket.

Some economic experts have stated that Rouhani will have to print money in order to pay for the merger and warned that such actions will lead to more inflation.