While Pakistan remained cautious and reluctant to increase trade ties with Iran in the past four years because of international trade sanctions imposed on its neighboring country, its government, according to the ministry of commerce and industry, has finalized the modalities for opening a banking channel with Tehran.
During a meeting of the National Assembly Standing Committee on Commerce, officials of the ministry informed that during the recent meeting with a high powered delegation led by Iranian Foreign Minister Mohammad Javad Zarif, all modalities have been finalized.
The Iranian top diplomat visited Islamabad last month at the head of a high-ranking politico-economic delegation, Pakistantoday.com reported.
According to the officials, during the meeting, both the governor and deputy governor State Bank of Pakistan were called in to discuss the banking issues. Subsequently, Pakistan’s central bank has been working on the options of opening banking links with Iran.
“We are analyzing how other countries have established trade ties with Iran despite the trade embargo. An important meeting was held at the ministry of foreign affairs, where all issues related to improving bilateral trade ties were discussed,” the officials said.
“SBP officials may brief the committee in the next meeting regarding developments on the banking issue.”
Minister of Commerce and Textile Industry Parvez Malik said Pakistani banks were reluctant to go for any kind of transaction due to the trade sanctions on Iran. The minister, however, admitted that India has opened its bank in Iran despite the restrictions on Iranian companies in international markets.
Bank Pasargad, an Iranian private lender, is soon to open a branch in India and is considering the establishment of three additional branches in that country in the future, a bank’s official announced in March.
Last year, the State Bank of Pakistan and the Central Bank of Iran signed an agreement on Banking and Payment Arrangement in Tehran with the objective of devising a settlement mechanism to promote bilateral trade.
As part of the next step, both the central banks will invite banks in their respective jurisdictions to act as authorized entities for undertaking trade transactions under the BPA.
