As Middle East erupts, Iran's Bank Pasargad's Mumbai branch plan faces further delays
March 02, 2026
The departments of financial services and revenue are analysing RBI’s comments on allowing Bank Pasargad to open a Mumbai branch, a proposal first put forward in 2018
Iran’s second-largest private lender Bank Pasargad may have to wait much longer to get a Reserve Bank of India (RBI) licence to open a branch in India following the eruption of hostilities in the Middle East, government officials told Moneycontrol.
A decision to allow the Iranian bank to open a branch in Mumbai is unlikely to be taken soon, with the fast-worsening conflict in the Middle East adding a fresh bout of uncertainty, officials said.
The department of financial services and the department of revenue are analysing RBI’s comments on allowing Bank Pasargad to open a Mumbai branch, a proposal first mooted in 2018.
Follow our live blog for the latest US-Iran conflict
Emails sent to the finance ministry and the RBI had not elicited a response at the time of publishing. The story will be updated when they respond.
The RBI can only grant a licence once it gets clearance from the ministries of finance, home and external affairs.
An internal document from February, reviewed by Moneycontrol, called for comments from relevant departments to be “expedited” on the Bank Pasargad matter.
In 2018, an India-Iran joint declaration endorsed the need for an effective banking channel for business transactions. Permission for Bank Pasargad to open a branch in India was under advance consideration, the statement had said.
Two years later, Bank Pasargad was sanctioned by the United States. The US treasury department slapped sanctions on Bank Pasargad and 17 other lenders on October 8, 2020.
Any financial institutions that engage in certain transactions or activities with these sanctioned entities "may expose themselves to secondary sanctions or be subject to an enforcement action", the order said.
In August 2025, the US expanded sanctions specifically against the bank’s tech subsidiary FANAP (Pasargad Arian Information and Communication Technology Company), accusing it of colluding with the Iranian government to develop surveillance technologies.
The Middle East erupted over the weekend after a week of tension when Israel and the US launched airstrikes on Iran on February 28, killing Iranian supreme leader Ali Khamenei and several senior aides. The strikes, which continue, targeted military sites, nuclear facilities, and leadership compounds in several cities.
Iran retaliated, hitting Israel and several cities in Gulf countries that harbour US bases, plunging the Middle East into its worst crisis in recent memory.
A decision to allow the Iranian bank to open a branch in Mumbai is unlikely to be taken soon, with the fast-worsening conflict in the Middle East adding a fresh bout of uncertainty, officials said.
The department of financial services and the department of revenue are analysing RBI’s comments on allowing Bank Pasargad to open a Mumbai branch, a proposal first mooted in 2018.
Follow our live blog for the latest US-Iran conflict
Emails sent to the finance ministry and the RBI had not elicited a response at the time of publishing. The story will be updated when they respond.
The RBI can only grant a licence once it gets clearance from the ministries of finance, home and external affairs.
An internal document from February, reviewed by Moneycontrol, called for comments from relevant departments to be “expedited” on the Bank Pasargad matter.
In 2018, an India-Iran joint declaration endorsed the need for an effective banking channel for business transactions. Permission for Bank Pasargad to open a branch in India was under advance consideration, the statement had said.
Two years later, Bank Pasargad was sanctioned by the United States. The US treasury department slapped sanctions on Bank Pasargad and 17 other lenders on October 8, 2020.
Any financial institutions that engage in certain transactions or activities with these sanctioned entities "may expose themselves to secondary sanctions or be subject to an enforcement action", the order said.
In August 2025, the US expanded sanctions specifically against the bank’s tech subsidiary FANAP (Pasargad Arian Information and Communication Technology Company), accusing it of colluding with the Iranian government to develop surveillance technologies.
The Middle East erupted over the weekend after a week of tension when Israel and the US launched airstrikes on Iran on February 28, killing Iranian supreme leader Ali Khamenei and several senior aides. The strikes, which continue, targeted military sites, nuclear facilities, and leadership compounds in several cities.
Iran retaliated, hitting Israel and several cities in Gulf countries that harbour US bases, plunging the Middle East into its worst crisis in recent memory.