India Envoy, ICCIMA Chief Discuss Banking Issues

EghtesadOnline: India’s government is holding talks with a new bank to facilitate trade with Iran and process Iran/India transactions. The new bank is set to work in tandem with UCO bank, according to Gaddam Dharmendra, India’s ambassador to Iran.

News ID: ۷۴۷۲۶۷

07 May 2019

During a meeting with Gholamhoessin Shafei, head of the Iran Chamber of Commerce, Industries, Mines, and Agriculture on Sunday, the senior diplomat proposed setting up a barter system between the two sides as a measure to overcome banking problems.

“Given the existing banking issues, barter can be considered a solution,” ICCIMA quoted him as saying.

Dharmendra also discussed ways to expand economic ties and expressed New Delhi’s interest in maintaining economic ties with Tehran, according to Financial Tribune.

The ICCIMA chief had earlier complained that banking issues between the two countries remain unresolved.

He referred to UCO bank, as an Indian institution with the mandate to process transactions with Iran, that has  “tightened restrictions on Iranian traders.”

UCO bank was appointed by the Indian government to handle payments for Iranian oil following the US withdrawal from the Iran nuclear deal last year.

It was selected because of its limited international exposure, which made it less vulnerable to US penalties for its involvement in the oil trade, processed in euros and rupees.

Besides UCO, The Economic Times said last week that India’s state-run IDBI bank received the nod to handle import-export transactions with Iran.

Citing a senior bank source, the news outlet said   IDBI  had stepped-up efforts to create Iran trade processing cells in three Indian cities.

Bilateral trade between India and Iran increased to $13.8 billion in 2017-18 from $12.9 billion a year before. India's exports to Iran were worth $2.5 billion.