Daily losses of 67 billion tomans, insolvent financial institutions, and impunity for politically connected clerics reveal a system built on corruption—not governance.
A Financial System Built on Corruption, Not Stability
The latest revelations about the Mellat (Melal) Credit Institution expose a crisis far larger than a single failed entity. According to Setareh Sobh, Mellat is losing 67 billion tomans every single day—a staggering number that illustrates the scale of corruption and economic decay that has defined Iran’s financial sector under the regime.
This is not an isolated case. It is part of a decades-long pattern.
Financial institutions with religious names—Samen al-Hojaj, Noor, Padeshah Shandiz, Kowsar, and others—were promoted as charities meant to assist the underprivileged. Instead, they became vehicles for speculation in currency, gold, real estate, luxury housing, and automobiles, destabilizing markets, driving up inflation, and plundering the savings of ordinary Iranians.
While claiming to “serve the poor,” these institutions were in fact extracting wealth from the poor.
How the Regime’s Institutions Fueled Inflation and Bankrupted the Public
During the Ahmadinejad years, these institutions grew unchecked, operating as shadow banks tied to military, political, and clerical networks. Their speculative activities intensified market volatility and directly contributed to soaring prices.
When they collapsed—as corruption inevitably surfaced—the public paid the bill.
- The Rouhani government ultimately covered 36 trillion tomans in accumulated losses from institutions like Samen al-Hojaj and Padideh Shandiz.
- It also absorbed over 130 trillion tomans in losses from military-affiliated banks (Ansar, Ghavamin, Mehr Eqtesad, Kowsar, etc.) by merging them into Bank Sepah.
And now, the same cycle repeats.
Mellat: A Symbol of Systemic Failure
Mellat’s financial indicators are catastrophic:
Capital adequacy ratio:
- –9.58% in 2022
- –11.4% in 2023
- –11.32% in the first quarter of 2024
- Registered capital: 1 trillion tomans
- Accumulated losses: over 13 trillion tomans
- Total debt (as of May 2024): 96.5 trillion tomans
Under Article 141 of commercial law, the institution should have been dissolved years ago. Instead, it continues operating—a sign of political protection, not financial viability.
Despite more than 12,500 trillion tomans owed to banks, Mellat not only avoided closure but managed to override government oversight. Even when the Supreme Council of Architecture and Urban Planning twice ordered a halt to illegal construction linked to the institution, Mellat and its partner Teklar Corporation obtained court permissions to continue.
The beneficiaries laugh while 1,000 families—many highly skilled professionals—suffer the consequences.
The Clerical Elite at the Center of the Scandal
One of the most striking questions remains unresolved:
How did a cleric with 500,000 tomans of initial capital acquire a fortune large enough to own the majority shares of a 27-story luxury tower in Shahrak-e Gharb?
This is not merely a corruption case—it is an indictment of an entire system where clerical networks and regime insiders accumulate vast wealth through fraudulent financial schemes, while ordinary Iranians watch their savings evaporate.
A System That Funds Failure—and Forces the Public to Pay
Former MP Ezzatollah Yousefian Molla describes the crisis with brutal clarity. In an interview with Setareh Sobh, he states:
“Allocating budget to ineffective and harmful institutions is a betrayal. Young people who are educated and skilled but jobless see a privileged class enjoying luxury simply because they are connected to power. This fuels anger in society.”
For decades, successive governments have been unable—or unwilling—to cut off funding to these “institutions” that drain the treasury without providing any public benefit. These entities, many tied to ideological or security organs, receive massive budgets while schools, hospitals, and critical public services fall into decay.
Molla warns that many of these organizations are not only useless but threats to national security, as their actions worsen public distrust and economic instability.
Corruption, Economic Collapse, and Social Rage
The ongoing financial disasters—from Mellat to Bank Ayandeh, dissolved this year after amassing 500 trillion tomans in losses—signal a system out of control.
This corruption-driven economic collapse has real consequences:
- Inflation continues to crush household finances
- Savings vanish due to institutional fraud
- Youth unemployment deepens
- Public anger sharpens
These scandals do not represent governance failures—they represent the regime’s governing model.
A Regime Consumed by Its Own Corruption
The crisis at Mellat is not a banking story. It is a window into a state whose financial architecture is built on extraction, favouritism, and impunity. It shows how Iran’s rulers protect corrupt insiders while forcing the public to pay for their failures—again and again.
As the economy deteriorates and corruption scandals multiply, the regime’s legitimacy erodes. The system’s own insiders now openly acknowledge that corruption is eating the country from within.
The question facing Iran today is not whether these institutions will collapse—many already have.
The question is how long a nation can endure the economic burden of a ruling class that refuses to govern, but never stops taking.
