SBI ready to facilitate Iran crude payment

New Delhi, Jan 8 (PTI) State Bank of India (SBI), the
nation's largest lender, on Saturday said it is ready to
facilitate payments for Iranian crude oil but is awaiting
notification of a bank that is not under the US sanctions
which can receive payments.

"Payments are not being routed (currently) because there
is no arrangement (to receive money at Iranian end). Iranians
have to line up a bank," SBI Deputy Managing Director and
Group Executive for International Banking Pratip Chaudhuri
said on the sidelines of the Pravasi Bharti conference here.
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 after RBI clamped
down on the main conduit Indian companies use for paying
Iranian oil.
"Right now, they are not able to pay for oil not because
we are afraid of the sanctions or something but because they
are not able to designate a suitable bank which would receive
the payment on their behalf," he said. "Once that it done, the
rest of the thing can be taken care of."
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 (ACU), 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 is also under sanction, we cannot deal with any kind
(of bank) under sanction," Chaudhuri said.
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.
"The LCs means an unconditional promise to pay at a
future date. How can we pay at a future date. The Iranians
have to engage a receiving bank. They should supply crude
based on contract," he added. PTI NAM
RCJ