Begin typing your search above and press return to search.

IDBI Bank Opens Processing In 3 Cities For Iran Trade

IDBI Bank Opens Processing In 3 Cities For Iran Trade

Sentinel Digital DeskBy : Sentinel Digital Desk

  |  29 April 2019 12:15 PM GMT

New Delhi: Amid uncertainty over India’s oil import possibilities from Iran after May 2 when the waivers to US sanctions on Iran are withdrawn, state run IDBI Bank has stepped-up efforts in this direction by creating Iran trade processing cells in 3 Indian cities. IDBI received the nod to handle import-export transactions with Iran in early March.

“IDBI Bank will shortly start setting up processing cells in Delhi, Ahmedabad and Kolkata. The bank already has a centre in Mumbai. The Indo-Iran trade settlements can be done at any of IDBI’s branches and these three centres will be the processing units,” a senior bank source said.

“Direct payments can be routed through the Iranian banks when a trader checks out with his IDBI Bank account number.”

Alhough IDBI got the mandate to handle the Iran import-export setlements in first week of March, however, due to the delay in receiving funds into the Iranian “vostro” accounts, the bank could not operationalise the trade settlement mechanism. Now with the receipt of some funds, the process will start, the source added.

According to the mechanism agreed by the two countries, Iranian banks will open “vostro” accounts with IDBI Bank in India, and payments by Indian importers, including oil companies and exporters, will be deposited into these accounts in rupees.

The bank will have designated trade finance officers in these cities to facilitate business transactions for Indian exporters dealing with Iran. IDBI Bank has also received started receiving funds from Iraninan banks for the export settlements of Iran, the source said.

It is still premature to say whether there will be oil imports from Iran or not post May 2, he added. The IDBI Bank has become the second bank permitted process Iran trade settlements, after UCO Bank, which was the only one handling rupee payments till now.

IDBI would also aim at easy funds allocation and direct settlement of export bills for exporters, including those dealing in rice and tea, the source said.

Its expansion into the bilateral banking space comes at a time when there are demands for creating similar bilateral mechanism in Indian rupees with other countries. (IANS)

Also Read: BUSINESS

Next Story