The joint bank, which has no name yet, is expected to have a capital of $30 million, with Iran holding 60 percent ownership, according to a report by Press TV, Iran's official news agency.
The reported deal culminates negotiations that have been ongoing since 2008. Both countries signed a number of economic agreements to promote mutual investments in industry, technology and trade which is expected to reach $5 billion a year.
The plans to set up a joint bank have been ongoing since 2008 with the aim of providing financial services in Syria to Iranian businessmen and investors.
While Syria and Iran maintains close political ties the level of economic cooperation between the two countries has not flourished. The new bank, which is to be located in Syria, is expected to provide financial services in Syria to Iranian businessmen and investors. In addition it will also provide services to the estimated one million Iranian pilgrims that visit Syria every year.
"The idea for this is to increase the economic relations which are relatively limited," Jihad Al-Yaziji, editor of the Syria Report, a business newsletter, told The Media Line.
The other agreements include the establishment of a joint industrial zone in Syria for Iranian investors, as well as preferred trade agreements. Current Iranian investments in Syria include an auto plant for the Iranian carmaker Khodro and a joint oil refinery.
"Iran is compensating and trying to catch up on the economic relation that Syria has with Turkey," Al-Yaziji said. "It's a good idea to use the Turkish ties as a model for Iranian relations."
In 2009, Turkey and Syria set up an economic trade zone which reportedly resulted in a 200 percent increase in trade over the first two months of this year.
However, one analyst, who spoke on condition they not be named, told The Media Line that the new deal was most likely "just a propaganda trick and the nothing will really change."
The strong political ties between Syria and Iran stretch back to the establishment of the Islamic Republic of Iran in 1979.
