Iran, Pakistan Firm on Clearing Banking Hurdles

EghtesadOnline: A high-level Iranian delegation on Monday conferred with their Pakistani counterparts on removing banking hurdles that have also hampered bilateral trade.

News ID: ۷۸۱۰۹۶

14 January 2018

The delegation was led by Iran’s Parliament Speaker Ali Larijani who arrived in Islamabad on Saturday night to take part in a counterterrorism conference aimed at discussing the threat of terrorism and coordinating counterterrorism efforts with counterparts from Pakistan, Russia, Turkey, China and Afghanistan.

In the Monday meeting, Samad Karimi, the head of Exports Department at the Central Bank of Iran, represented the regulator while Iran’s Ambassador to Pakistan Mehdi Honardoust was another top representative, IRNA reported.

Sardar Ayaz Sadiq, speaker of the National Assembly of Pakistan, and Tariq Bajwa, governor of the State Bank of Pakistan, in addition to a number of officials from the South Asian nation’s ministries of economy and foreign affairs attended the meeting, Financial Tribune reported.

After hearing remarks by the Pakistani central bank’s head, Sadiq reportedly promised that the current banking problems between Iran and Pakistan will be cleared soon and “within the next month at the most”.

Iran’s top lawmaker pointed to the country’s trade deals with various European countries and elsewhere, and called for improving trade relations with Pakistan.

“Iran has more than $6 billion in annual bilateral trade ties and therefore realizing the $5 billion trade target with Pakistan is not inaccessible if both countries work toward it,” Larijani said.

He also stressed the importance of removing banking obstacles to boost trade.

Iran and Pakistan have taken several notable steps in the past few months for easing banking transactions and boosting trade, but none seems to have taken real hold yet.

In mid-April, the State Bank of Pakistan and the Central Bank of Iran signed an agreement on Banking and Payment Arrangement in Tehran with the objective of devising a settlement mechanism to promote bilateral trade.

As part of the next step, both the central banks will invite banks in their respective jurisdictions to act as authorized entities for undertaking trade transactions under the BPA.

During the third meeting of the Trade Negotiation Committee on Pakistan-Iran Free Trade Area Agreement in late November in Tehran, the two countries finalized the draft of the much-awaited free trade agreement.

In the Monday meeting, CBI’s Karimi outlined the improvement of economic and financial indicators in Iran in the past few years and referred to official statistics and reports as evidence.

The implementation of Iran’s nuclear deal with world powers was another milestone enumerated by the official who also drew a picture of how Iran is trying to engage in effective deregulation, boost transparency and increasingly adhere to international regulations and standards in banking.

“Correspondent banking relations between Iran, Europe and many other countries, including Russia, Oman, South Korea and India, are also being established at present within the framework of international regulations,” Karimi concluded.