Turkey Revokes Licence of Iran's Mellat Bank Amid Rising US Economic Pressure on Tehran

Turkey's BDDK banking watchdog has officially revoked the operating licence of Iranian lender Mellat Bank's branch in Istanbul, as detailed in a notice published in the Official Gazette on Saturday. This development comes as the US continues to push nations to heighten economic pressure on Tehran.

While the published notice did not explicitly reference US measures or specific operational issues, it noted that the decision was enacted under a clause in Turkey's banking law. This provision permits the revocation of a lender's licence if its continued operations are perceived as a risk to depositors' rights or the overall security and stability of the financial system.

Earlier this month, the US Treasury Department imposed sanctions on a small Turkish investment bank and two subsidiaries. US ambassador to Turkey, Tom Barrack, clarified that the action targeted the conduct of a single entity rather than a nation, banking system, or ally, emphasizing that the health of the Turkish financial system remains unquestioned.

In addition to the banking restrictions, the US Treasury noted that Turkey and Oman decided to halt flights by Iranian airline Mahan Air following discussions regarding compliance with US measures against Iran. Mahan Air, which currently faces US sanctions over alleged ties to the Islamic Revolutionary Guard Corps, confirmed that it would suspend flights to Turkey and Oman starting September 21 until further notice. Neither Ankara nor Muscat has made a public announcement regarding the flight suspensions.

The cancellation of these flights further isolates Tehran by reducing its restricted air connectivity, particularly as Istanbul serves as a vital transit hub for Iranians accessing Europe and other international destinations. Although other connecting options between Iran and Turkey persist, escalating US pressure is increasingly deterring companies from servicing Iranian airlines.

Following US sanctions imposed on September 8 against 27 Iranian airlines and several foreign companies supporting Iran's aviation sector, Washington warned that entities enabling penalized Iranian aviation activities could face severe consequences. These actions form part of a broader US campaign to increase economic pressure on Iran, aligning with US Treasury Secretary Scott Bessent's introduction of Operation Economic Outcast last month to further restrict Iran’s economy.