NEW DELHI: India will settle payments for Iranian oil using rupee via local banks starting in November as US sanctions will make it difficult to settle trades via European banks, two industry resources said on Thursday.
In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the renewal of US sanctions. Some sanctions took impact from August 6 whilst the ones affecting the oil and banking sectors will start from November four.
"We are bracing up for any eventuality we have to make a payment and we don't want to default on making payments," one of the vital resources said.
The resources said India has selected UCO Bank and IDBI Bank for facilitating payment to Iran.
Indian refiners are currently using State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros. SBI has told refiners it might forestall dealing with Iran payments from November.
The 2d supply said after the United States introduced it might re-impose sanctions in May, Iran has already won payments for some cargoes in rupee.
Reuters in June reported that India is taking a look to restore the its earlier rupee payment mechanism with Iran. During the former sanctions regime, India followed a barter-like scheme to buy oil from Iran whilst the Middle Eastern nation used rupees to import goods from India.
"Previously we settled 45 per cent of our trade in rupees this time it could be 100 per cent. We have to mutually decide the number," said the primary supply.
India, Iran's top oil consumer after China, remains to be in quest of some exemptions to the sanctions from the United States even though some refiners have already curtailed purchases because of insurance problems tied to the sanctions.
IDBI didn't reply to requests for a comment whilst UCO Bank's Managing Director R Ok Takkar didn't reply to telephone calls in quest of comment.
In May, US President Donald Trump withdrew from a 2015 nuclear accord with Iran and ordered the renewal of US sanctions. Some sanctions took impact from August 6 whilst the ones affecting the oil and banking sectors will start from November four.
"We are bracing up for any eventuality we have to make a payment and we don't want to default on making payments," one of the vital resources said.
The resources said India has selected UCO Bank and IDBI Bank for facilitating payment to Iran.
Indian refiners are currently using State Bank of India and Germany-based Europaeisch-Iranische Handelsbank AG to buy Iranian oil in euros. SBI has told refiners it might forestall dealing with Iran payments from November.
The 2d supply said after the United States introduced it might re-impose sanctions in May, Iran has already won payments for some cargoes in rupee.
Reuters in June reported that India is taking a look to restore the its earlier rupee payment mechanism with Iran. During the former sanctions regime, India followed a barter-like scheme to buy oil from Iran whilst the Middle Eastern nation used rupees to import goods from India.
"Previously we settled 45 per cent of our trade in rupees this time it could be 100 per cent. We have to mutually decide the number," said the primary supply.
India, Iran's top oil consumer after China, remains to be in quest of some exemptions to the sanctions from the United States even though some refiners have already curtailed purchases because of insurance problems tied to the sanctions.
IDBI didn't reply to requests for a comment whilst UCO Bank's Managing Director R Ok Takkar didn't reply to telephone calls in quest of comment.
India set to pay for Iranian oil using rupee from November: Sources
![India set to pay for Iranian oil using rupee from November: Sources]()
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September 20, 2018
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