Russian banking institutions and trade interests in Persia at the turn of 19th - 20th centuries

The author examines the history of the emergence of a network of banking institutions in Persia belonging to rival powers - the Russian Empire, Great Britain, and Germany. An analysis of documents on the project to open agencies of the Tiflis Commercial Bank in Persia by Russian entrepreneurs revealed the significant risks inherent in the Persian market, which deterred Transcaucasian merchants from implementing their plan. It is shown that the Discount and Loan Bank of Persia, operating under the control of the Russian government, had to face all of these risks. The author concludes that the Russian banking institution’s work in Tehran was fruitful - thanks to its efforts, by the early 20th century, a third of the Tehran market was represented by Russian goods, whereas traditionally it was closed to Russian exporters. However, the bank’s chosen strategy of competing with Russian entrepreneurs in Persia negatively impacted Russian trade in that country as a whole. The bank demonstrated insufficient effectiveness in supporting private merchants, and during the First World War, for objective reasons, this function ceased to exist altogether.