58509
The balance in rupee account with the UCO Bank is fast depleting following the decision to make payment to Iran in freely convertible currency for oil imports.
The balance in rupee account with the UCO Bank is fast depleting following the decision to make payment to Iran in freely convertible currency for oil imports.

Indian Banks’ Apprehension Blights Trade With Iran

Indian Banks’ Apprehension Blights Trade With Iran

India’s trade with Iran is yet to be fully normalized even a year after the lifting of international sanctions on Tehran.
Indian exporters are complaining of difficulties faced by them due to some Indian nationalized banks refusing to deal with Iran-related transactions, according to the apex body for exporters in the country—the Federation of Indian Export Organizations, the English-language Indian newspaper The Hindu reported.
This is despite the Reserve Bank of India’s notification in May 2016, specifying that payment or remittance or reimbursement can be made from or to Iran in any freely convertible currency for imports from Iran and exports to that country.
According to Ajay Sahai, director general and chief executive officer of FIEO, “We have been given to understand that a few banks have already started dealing in Iran for negotiation of documents invoiced in freely convertible currency (other than the US dollar).”
Sahai added that, “However, some of the nationalized banks have not yet started the same, which has caused concern and inconvenience to the exporters, particularly as the balance in rupee account with the UCO Bank is fast depleting following the decision to make payment to Iran in freely convertible currency for import of oil.”

   UCO Bank
Previously, following the sanctions on Iran over its nuclear activities, both nations had agreed in 2012 that 45% of India’s oil import payments to Iran would be paid in rupees and deposited in UCO Bank as that bank hardly had an exposure to US or European Union.
In turn, Iran was to utilize that amount to pay for its imports from India. It is learnt that the balance in the rupee account may not be sufficient to cover three months of India’s exports to Iran.
A senior official in a public sector bank, however, said on condition of anonymity that there have been no problems regarding Iran-related transactions in currencies other than the US dollar. 
“Exporters and importers have been advised to carry out their transactions in currencies such as the euro wherever possible,” the official said, adding that banks still have apprehensions that US regulators could take arbitrary decisions on Iran-related transactions.

  India-Iran Trade
India’s trade with Iran in fiscal 2016 was $9 billion, of which $6.3 billion were imports from Iran (of which $4.5 billion constituted the oil import bill), while India’s exports were worth only $2.7 billion.
Of the $5.4 billion worth imports from Iran in April-October FY’17, oil imports were $4.5 billion. India’s exports to Iran during April-October FY’17 were $1.4 billion. 
Trade between these two countries were worth $16.2 billion in 2011-12 (India’s exports amounted to $2.4 billion while imports from Iran were worth $13.8 billion).
To boost India-Iran trade, FIEO in December 2016 asked RBI to allow Iranian banks such as Persia International Bank, Parsian Bank, Bank Pasargad, Bank Mellat and Saman Bank to open branches in India.

Short URL : https://goo.gl/Pg57rw
  1. https://goo.gl/kbmhbJ
  • https://goo.gl/C5QCCr
  • https://goo.gl/nR8XwV
  • https://goo.gl/lhF5eV
  • https://goo.gl/9mIQ5j

You can also read ...

Turkey to Defy US Sanctions, Maintain Trade Ties With Iran
Turkey intends to defy US President Donald Trump and continue...
An Iraqi peddler displays Iranian currency for sale in the capital Baghdad on Aug. 9.
Iraqi Prime Minister Haider al-Abadi has raised the level of...
CBI Delivering 2.5m Presold Gold Coins
The Central Bank of Iran has started the delivery of 2.5...
Google Rolls Back Android Messages to Old Design
On Thursday, it looked as though Google was starting to roll...
Private Housing Investments Rise
The uptrend in private sector investments in the housing...
Iran Chamber of Commerce Urges FATF Compliance
Iran Chamber of Commerce, Industries, Mines and Agriculture,...
New Foreign Exchange Policy:  Exporters’ Savior or Bane?
The new forex policy, announced last week by the Central Bank...
Hoarded Goods Worth $40m Confiscated in Tehran
Essential goods worth 3.2 trillion rials (around $40 million)...

Add new comment

Read our comment policy before posting your viewpoints

Trending

Googleplus