No payment problems for Iran's exports: Uco bank
Calcutta: despite the growing tension between the United States and I ran Indian exporters Doing business with the Middle East country may not have any problem receiving your payments in the Indian currency until this fiscal end. The city Uco Bank currently has enough “availability of funds” in its rupee accounts, which had been opened to facilitate Indo- I ran bilateral trade settlements, to make payments “at least for sometime” to the exporters for shipping products to the West Asian nation, according to a senior bank official.
When asked whether Indian exporters will have any problem in getting their payments in the rupee under the “Rupee Payment Mechanism”, the Uco Bank official said: “It depends on the availability of funds. But, at least I don’t think there is any immediate problem for making payments.”
India and I ran had signed a deal in the last year for oil import payments in rupees. The MoU was signed as the US had allowed India and seven other nations to keep buying I ran ian oil despite sanctions were reimposed on the Islamic state in November, 2018. According to the agreement Indian oil companies made rupee payments in Uco Bank accounts, and 50% of those funds were earmarked for making the payments for the exports from India to I ran .
Uco Bank has been facilitating the bi-lateral banking trade transactions with I ran under the "Rupee Payment Mechanism" since February, 2012, as mandated by the government and RBI.
Last week, tensions between I ran and the US increased after an American drone strike killed top I ran ian general Qasem Soleimani.
"The funds (in Uco Bank 's rupee accounts) are basically freezed, whatever has come has come. Because, the rupee inflow was on account of imports from I ran . Imports from I ran were mainly in terms of crude oil. That is gone now. So, the inflow has already stopped...almost nil. It is only the outflow for the exports which are being made to I ran ," the Uco Bank official informed.
I ran is a key trading partner of India. It imports basmati rice, cereals, tea, coffee, spices and organic chemicals, among others. "The only problem is once this money, whatever is there in the rupee accounts, exhausts, then again we would have to think what payment mechanism has to be put in place," the official said, adding Indian exporters to I ran would not face any problem in getting their payments in the rupee at least till this fiscal-end.
The bank informed the government about the situation. Many meetings are taking place, the official said. In a possible schedule for when the government could present some new clarifications about the payment mechanism, he said that after the last escalation of tensions, it was difficult to predict what turn it will take.