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UCO Bank plans to open accounts for more Iranian banks

UCO Bank is planning to open accounts of more Iranian banks to facilitate bilateral trade payments between the two countries. The bank has already opened accounts for six Iranian banks. Four more have approached the bank and it has sought the RBI’s approval for opening their accounts and finallay it will have accounts of 10 Iranian banks, said Arun Kaul, chairman and managing director of the bank. He said the RBI approval was expected to come within a few weeks, following which the accounts would be created. Parsian Bank, Bank Pasargad, EN Bank and Saman Bank are some of the major Iranian lenders who hold account with the city-based bank. Uco Bank handles the payments of India-Iran bilateral trade, particularly oil. After the imposition of the US sanction against Iran, India and the West Asian country had formulated a payment arrangement whereby Indian refiners partly paid for Iranian crude in rupees in the accounts with Uco Bank. The US has recently eased the sanctions, but the payment system in rupee remains. Indian exporters in turn are paid out of the rupee deposits in those accounts for commodities such as rice, tea and pharmaceuticals, which are imported by Iran.

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