ID :
156320
Sat, 01/08/2011 - 10:36
Auther :
Shortlink :
https://oananews.org//node/156320
The shortlink copeid
SBI refuses to issue LCs for Iran oil
New Delhi, Jan 7 (PTI) Days after India's central banking
system RBI clamped down on the main conduit Indian companies
use for paying Iranian oil, the country's largest state-owned
banking and financial services company State Bank of India has
refused to facilitate payments through an alternate temporary
channel.
SBI has refused to issue fresh Letters of Credit (LCs) to
public and private sector refiners who import some 12 million
barrels of crude oil from Iran every month, an official with
the nation's largest lender said.
"There are uncertainties involved. We need to be sure
about the payment mechanism," the official said after a
meeting called by India's Finance Ministry to discuss the row.
In absence of LC, which is a letter from a bank
guaranteeing the buyer's payment to seller on time and for the
correct amount, one cargo for Hindustan Petroleum (HPCL) is
stuck at Iranian ports.
One cargo meant for Mangalore Refinery (MRPL), India's
largest importer of Iranian crude, is being loaded today but
it is uncertain if Iran will deliver it in absence of a LC.
There has been no disruption in crude oil supplies so far
as LCs, requisitioned prior to the December 23 Reserve Bank of
India (RBI) order, were being opened. SBI official said no LC
is being opened now.
Industry sources said SBI wants oil firms to make advance
payments for the crude imports, a proposal which is not
acceptable to public sector refiners who fear that Iranians
cannot be held accountable in case of default in delivery once
money is transfered in advance.
Alternatives such as SBI facilitating payments on
corporate guarantee would be discussed in second round of
meeting at the finance ministry, they said.
The Reserve Bank of India on December 23 said that all
trade-related payments with Iran had to be made outside the
Asian Clearing Union, a regional clearinghouse through which
most India-Iran trade was being conducted.
Earlier this week, India and Iran had agreed to route
payments through Hamburg-based European-Iranian Trade Bank AG
(EIH), an Iranian bank that is already under US sanctions.
It was said that SBI could transfer money from its
Frankfurt branch to the bank but SBI has so far refused to
play ball fearing it could face sanctions by the US.
EIH has not been sanctioned by the United Nations or the
European Union. But in September, the US Treasury blacklisted
the bank saying it provided a financial lifeline to Iranian
companies that it alleges support weapons proliferation.
A finance ministry official said SBI would take suitable
precautions to avoid possible US sanctions due to any dealings
with the blacklisted EIH.
"We can look at making the temporary arrangement more
permanent if it works out. An Indian delegation will be
visiting Tehran next week to discuss the issue," he said. MORE
PTI
system RBI clamped down on the main conduit Indian companies
use for paying Iranian oil, the country's largest state-owned
banking and financial services company State Bank of India has
refused to facilitate payments through an alternate temporary
channel.
SBI has refused to issue fresh Letters of Credit (LCs) to
public and private sector refiners who import some 12 million
barrels of crude oil from Iran every month, an official with
the nation's largest lender said.
"There are uncertainties involved. We need to be sure
about the payment mechanism," the official said after a
meeting called by India's Finance Ministry to discuss the row.
In absence of LC, which is a letter from a bank
guaranteeing the buyer's payment to seller on time and for the
correct amount, one cargo for Hindustan Petroleum (HPCL) is
stuck at Iranian ports.
One cargo meant for Mangalore Refinery (MRPL), India's
largest importer of Iranian crude, is being loaded today but
it is uncertain if Iran will deliver it in absence of a LC.
There has been no disruption in crude oil supplies so far
as LCs, requisitioned prior to the December 23 Reserve Bank of
India (RBI) order, were being opened. SBI official said no LC
is being opened now.
Industry sources said SBI wants oil firms to make advance
payments for the crude imports, a proposal which is not
acceptable to public sector refiners who fear that Iranians
cannot be held accountable in case of default in delivery once
money is transfered in advance.
Alternatives such as SBI facilitating payments on
corporate guarantee would be discussed in second round of
meeting at the finance ministry, they said.
The Reserve Bank of India on December 23 said that all
trade-related payments with Iran had to be made outside the
Asian Clearing Union, a regional clearinghouse through which
most India-Iran trade was being conducted.
Earlier this week, India and Iran had agreed to route
payments through Hamburg-based European-Iranian Trade Bank AG
(EIH), an Iranian bank that is already under US sanctions.
It was said that SBI could transfer money from its
Frankfurt branch to the bank but SBI has so far refused to
play ball fearing it could face sanctions by the US.
EIH has not been sanctioned by the United Nations or the
European Union. But in September, the US Treasury blacklisted
the bank saying it provided a financial lifeline to Iranian
companies that it alleges support weapons proliferation.
A finance ministry official said SBI would take suitable
precautions to avoid possible US sanctions due to any dealings
with the blacklisted EIH.
"We can look at making the temporary arrangement more
permanent if it works out. An Indian delegation will be
visiting Tehran next week to discuss the issue," he said. MORE
PTI
