Indian Refiners Pay for Iranian Oil in Rupees

Indian Refiners Pay for Iranian Oil in RupeesIndian Refiners Pay for Iranian Oil in Rupees

India has begun paying Iran for oil in rupees, a senior bank official said Tuesday, the first such payments since the United States imposed new sanctions against Tehran in November.
Washington gave a six-month waiver to eight countries, including India, allowing them to import some Iranian oil, Reuters reported.
India, the world's third biggest oil importer, wants to continue buying oil from Iran as it offers free shipping and an extended credit period, while Iran will use the rupee funds to mostly pay for imports from India.
"Today we received a good amount from some oil companies," Charan Singh, executive director at state-owned UCO Bank told Reuters. He did not disclose the names of refiners or how much had been deposited.
New Delhi recently issued a notification exempting payments to the National Iranian Oil Company for crude oil imports from steep withholding taxes, enabling refiners to clear an estimated $1.5 billion in dues.
An industry source said India's top refiner Indian Oil Corp and Mangalore Refinery & Petrochemicals have made payments for Iranian oil imports. Neither was immediately available for comment.


New Mechanisms 

Iran is devising payment mechanisms including barter with trading partners like India, China and Russia following a delay in the setting up of a European Union-led special purpose vehicle to facilitate trade with Tehran, Foreign Minister Javad Zarif said earlier on Tuesday.
In the previous round of US sanctions, India settled 45% of oil payments in rupees and the remainder in euros but this time it has signed deal with Iran to make all payments in rupees as New Delhi wants to fix its trade balance with Tehran.
Indian imports from Iran totaled about $11 billion between April and November, with oil accounting for about 90%.
Singh said Indian refiners had previously made payments to 15 banks, but they will now be making deposits into the accounts of only nine Iranian lenders as one had since closed and the US has imposed secondary sanctions on five others.
The nine banks are Saman Bank Corp., Bank Pasargad, Bank Eghtesad Novin, Karafarin Bank, Bank Sarmayeh, Middle East Bank, City Bank, Bank Hekmat Iranian, and Tourism Bank.

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