New Delhi:India will pay Iran $1.65 billion through the UAE central bank to clear over 40 per cent of the backlog payments for oil imports. Since February 2013 when U.S. blocked payment channels, India has been paying 45 per cent of its Iran oil bill in rupees through a Uco Bank branch in Kolkata. For the rest, it has been waiting for a payment channel.
Under the two-stage payment mechanism worked out, Indian refiners, in proportion to their dues, will make rupee payment to the Uco Bank. This money will be transferred to the RBI for onward credit to the central bank of United Arab Emirates.
The UAE central bank will then make payments in dirhams to Iran. Officials said the first two instalments may be paid this month and the third $550 million tranche by July 20, the deadline set by the U.S. and five other world powers for Iran to receive part of its past payments from its oil buyers.
Under an interim nuclear deal with U.S. and five other world powers, Iran on November 24, 2013, won access to $4.2 billion in past oil revenues from a number of countries including India. The funds, which previously could not be transferred as western powers clamped down on payment routes, were to be paid in eight instalments of $550 million each beginning with the first transfer by Japan on February 1.
India had been, since July 2011, paying in euros to clear 55 per cent of its purchases of Iranian oil through Ankara-based Halkbank. The remaining 45 per cent due amount was remitted in rupees through Uco Bank. Payments in euro through Turkey ceased from February 6 2013 but the rupee payments for 45 per cent of the purchases continued through Uco Bank.
Bureau Report
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