Pakistan’s Ministry of Commerce has asked the central bank and private banks to come up with a mechanism that would allow the resumption of banking transactions between Pakistan and Iran.
Despite the lifting of sanctions on Iran in January, trade between the two countries is still affected by a lack of mechanism that would allow normal banking transactions.
“We have asked the State Bank of Pakistan and private banks to develop a consortium for evolving a mechanism as sanctions on banking transactions are still there from the international community,” said Commerce Minister Khurram Dastgir as reported by tribune.com.
He said that the ministry convened a special meeting recently in Islamabad and had invited representatives of State Bank of Pakistan and private banks, who have complained that banking channels are still facing difficulties. “Private banks have particularly expressed concern that they are facing challenges in opening LCs in dollars and even in euros with Iran,” said Dastigir.
The minister added that the aforementioned mechanism would aid traders in opening their LCs to trade with Iranian businesses.
Studying FTA
He said that many steps have been taken to jack up bilateral trade with Iran and in this regard a five-year bilateral trade roadmap has been developed and the document was given to an Iranian delegation in March.
Besides, the minister said that initial draft for the proposed Pakistan-Iran Free Trade Agreement (FTA) has also been handed over to the Iranian authorities to study and give their input. He said that since Iran is not a member of WTO, any agreement with Iran will be made keeping that in view.
To improve bilateral trade and investment, the two countries have taken steps including frequent holding of trade fairs and exhibitions in each other’s countries.
Dastgir said Pakistan will soon hold a special exhibition in Iran, whose dates are to be finalized after consulting the Iranians.
