Iran declared one of the country’s largest private banks bankrupt, with its assets absorbed by the state,

official media reports, in a rare move in the country grappling with international sanctions.

Founded in 2012, Ayandeh Bank had a network of 270 branches across the country, including 150 in the capital Tehran alone. But it had more recently been crippled by debt, with accumulated losses amounting to the equivalent of about $5.2 billion and roughly $2.9 billion in debts, according to the ISNA news agency.

Today, queues of customers could be seen outside a former Ayandeh Bank branch in Tehran, with police also present, an AFP journalist reports.

The state-owned Melli Bank has absorbed the assets of the now-defunct Ayandeh Bank, following a decision by the Central Bank, which has given assurances that depositors will be able to recover their savings.

“The transfer from Ayandeh Bank to Melli Bank is now complete,” says Melli Bank director Abolfazl Najarzadeh on state television.

On Thursday, Iranian Economy Minister Ali Madanizadeh said Ayandeh Bank customers had “nothing to worry about.”

An official at the Central Bank of Iran, Hamidreza Ghaniabadi, said “bad debts” had prompted the bankruptcy.

He told Iran’s IRNA news agency that “more than 90 percent of Ayandeh Bank’s funds were allocated either to parties related to the bank or to projects managed by the bank itself,” which were never repaid.

Ayandeh Bank had been behind lavish projects such as the immense Iran Mall shopping complex in Tehran, which includes an ice rink and cinemas.

In addition to Ayandeh, five other banks — Sarmayeh, Day, Sepah, Iran Zamin, and Melal — are also facing difficulty, according to Iran’s Tasnim news agency.

The United Nations reimposed tough sanctions on Iran in September after months of tense diplomacy aimed at reviving nuclear talks derailed since June, when Israeli and US forces bombed Iranian nuclear facilities.

The sanctions are a “snapback” of measures frozen in 2015 when Iran agreed to major restrictions on its nuclear program under a deal that US President Donald Trump withdrew from in 2018 during his first term.

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