Iran’s long-talked about merger of private financial institutions linked to the armed forces and security services will commence in the coming weeks as Tehran seeks to overhaul its banking sector.

During the February 26, 2019 General Assembly of the Central Bank of Iran, President Hassan Rouhani announced that the move, which has already received prior approval, will start by the end of the Persian Calendar year on March 21, 2019.

Ansar Bank, Hekmat Iranian Bank, Ghavamin Bank, Mehr Eqtesad Bank, and Kowsar Markazi Credit Company -- commonly referred to by Iranian media as “armed forces banks” -- will merge into the state-owned Bank Sepah.

Ghavamin Bank Managing Director Gholam Hossein Taghi Nataj told Mehr News Agency that the merger will be conducted over a five-year transition period in which the financial institutions will continue to operate under pre-existing corporate structures.

“Private banking in Iran has failed,” Nataj told the Iranian outlet. “We shouldn’t have privatized banking at this point. . . . We must nationalize the banking sector meanwhile and then move towards privatizing banking.”