Two Lenders Seek Entry
Turkey's state-owned Ziraat Bank and the private Aktif Bank have submitted applications to open branches in Syria, with operations expected to begin in the near term. The step follows a stated agreement between the two governments to permit Turkish lenders to establish a presence, and the legal and regulatory work needed to enable it is under way.
The Turkish minister of commerce said the two sides had reached a mutual understanding on opening Turkish banks in Syria, while Syria's minister of economy and industry has taken part in the talks. The applications mark the first move by foreign state and private banks to enter the Syrian market under the new arrangement.
Why It Matters for Trade
Trade between the two countries has expanded, but cross-border payments still depend heavily on cash and informal money-transfer companies. A formal banking channel would let international transfers, trade financing, letters of credit and external payments move through regulated institutions rather than the parallel market.
The change could also set a precedent, potentially encouraging other Arab and regional banks to seek licenses in Syria and widening the country's access to correspondent banking after years of isolation.
Regulatory Gaps
Syria's banking framework was not built to host large foreign branches operating to current international standards. Authorities would need to set clear licensing conditions, capital requirements, supervision mechanisms and limits on currency transactions before the branches can function fully.
Incoming banks are also expected to apply strict customer-identification, beneficial-ownership and anti-money-laundering checks. Weak commercial and financial records inside Syria could narrow the range of clients and transactions the new branches are willing to handle.
Deposits and Currency
Many Syrians hold large cash reserves after years of withdrawal restrictions and currency instability, and rebuilding trust in banks will determine how much of that money returns to the formal system. Without genuine deposits and the freedom to move funds, the lending and financing capacity of any new branch stays limited.
It is not yet settled whether the branches will operate only in Syrian pounds (SYP) or also handle Turkish lira, US dollars (USD) and other currencies, a question that touches monetary policy and central bank oversight.
An Uneven Field
Turkish banks would enter a market that already includes foreign-linked institutions such as the Saudi-French Bank (BIMO) and Jordan's Arab Bank. Their larger capital, technology and correspondent networks could raise service quality, but would create an uneven contest if the newcomers receive guarantees or preferential treatment.
The real test will be whether the branches finance trade and lend to Syrian businesses, not simply open their doors.