Iran has requested the Ministry of Finance and the Reserve Bank of India to allow it open accounts in multiple banks to facilitate better non-oil trade between the two nations.
At present, only UCO Bank facilitates transactions with Iran and those are oil related.
According to Iranian Ambassador to India Gholam Reza Ansari, as the UCO Bank account deals with only oil transactions, the Persian Gulf nation needs to open accounts in different banks for better non-oil trade between the two countries.
“We want to remove this monopoly of UCO Bank. This is why we are looking for diversifying our banks and make business more competitive. Definitely it would be in the benefit of Indians as well as the Iranians,” Mr. Ansari told reporters on the sidelines of an interactive programme organised by Federation of Andhra Pradesh Chambers of Commerce and Industry (FAPCCI).
“We request the RBI to give us permission to deal with more Indian banks in this country. This proposal has been given to Ministry of Finance as well as the RBI,” he said.
India had since July 2011 paid in Euros to clear 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 per cent due amount was remitted in rupees in accounts Iranian Oil Company opened in Kolkata-based UCO Bank.
Tougher sanctions blocked the payments in euro through Turkey from February 6 last year but the rupee payments for 45 per cent of the purchases continued through UCO Bank.
“UCO Bank account is just for oil business which is nonsense” Mr. Ansari said, adding the trade relation between the countries expanded beyond oil and Iran is keen to look for alternative channels in terms of opening accounts in multiple banks to facilitate more business. On bilateral trade with India, he said it may go over $ 15 billion during the current fiscal as against over $ 14 billion in the last fiscal. Exports from India to Iran are increasing year-on-year, leading to healthy balance in the trade, Mr. Ansari said.
On the possible oil import cut by India next year, he said it is up to the Indian government to take decision on the quantity of oil imports. He, however, felt that it would be economically cheaper for India to import crude from Iran due to proximity between the two nations. He said there is a proposal to build north-south rail corridor in Iran which would boost trade in the region.