UCO Bank Denies Cutting Iran Ties

India's state-owned UCO Bank has denied plans to halt processing Iranian transactions.

"UCO Bank is committed to bilateral settlement of permissible transactions between Iran and India," Sabeer Nazeem, the bank's chief representative in Tehran told the Financial Tribune on Tuesday.

The confirmation was in response to a claim by Parham Rezaei, deputy head of the Iran-India Joint Chamber of Commerce that UCO may decide to suspend Iran-related transactions.

"The Indian bank has decided to stop working with Iran’s banks from next week due to the fresh US sanctions against the banking sector. However, given the results of the US vote the lender may rethink," the chamber's website quoted Rezaei as saying Saturday.

Indo-Iran trade was hurt after Donald Trump withdrew the US from the Joint Comprehensive Plan of Action in 2018 and announced tough new restrictions on key Iranian sectors, namely banks, insurance, shipping, auto and other key industries.

The impact on two-way trade was more pronounced after India’s pro-US right-wing BJP government stopped buying Iranian oil in 2019.

In 2018-19, bilateral trade was near $17 billion (largely India's oil imports). In April 2019 to November 2020, bilateral trade was said to be $3.5 billion. There was a significant drop in Iran’s imports from India because Iranian oil exports to India was zero.