As the western sanctions on Iran are getting out of the way, the sole funneling agency for India’s oil trade with Iran during the restricted period since 2012, is looking to expand business opportunities by leveraging existing tie-ups.
A four-member UCO team comprising executive director JK Garg visited Teheran recently to ensure that it remains the preferred bank to support Indo-Iran bilateral trade, which is expected to grow over a third to $6 billion this fiscal year with the easing of sanctions.
“We have established a relationship with Iran over the last three years. We need to leverage on this,” Garg told the Economic Times in an interview.
“More business opportunities are likely to emerge from Iran as trade volume will grow when the sanctions are removed,” Garg said.
Going forward, the bank may have to compete with other Indian lenders such as State Bank of India, which are planning to restore old links with the Islamic Republic and offer full-scale banking services.
Iran and world powers have sealed an accord which calls for lifting of the economic restrictions in lieu of Iran curbing its nuclear program.
The UCO team visited Central Bank of Iran and officials from leading commercial banks in Iran such as Bank Parsian and Bank Pasargad to explore financing opportunities to their importers and exporters clients.
These banks along with eight others including Karafarin Bank, Middle East Bank and Bank Hekmat Iranian opened rupee accounts with UCO to support Indo-Iran bilateral trade when the US and the European nations imposed restrictions on dollar-trade.
UCO’s zero exposure to the US and western financial system helped it earn this special status while exposed banks like SBI had lost business because of the sanctions. The bank has limited overseas business with branches only in Singapore and Hong Kong.
