Bloomberg: India barred an Iranian bank from opening a branch in the country because of U.S. pressure, making it harder for the Persian Gulf state to settle oil trades with its second-biggest crude customer.
By Anto Antony and Pratish Narayanan
India barred an Iranian bank from opening a branch in the country because of U.S. pressure, making it harder for the Persian Gulf state to settle oil trades with its second-biggest crude customer, two people with knowledge of the matter said.
Parsian Bank, based in Tehran, had sought approval for a Mumbai office to facilitate trade transactions in rupees, the people said, declining to be identified because the information is confidential.
An official at Parsian Bank in Tehran who declined to be identified said the lender was yet to be granted a permit. A person who answered the telephone at India’s finance ministry in New Delhi said D.S. Malik, a spokesman, was unavailable to comment.
U.S. Secretary of State Hillary Clinton will meet Indian leaders in New Delhi today where she will discuss assurances from the South Asian nation that it is curtailing Iranian crude imports. The U.S. and its allies are seeking international support for a campaign to pressure the Islamic Republic over its nuclear program which they say is a cover for building atomic weapons and Iran says is for civilian purposes.
India, which relies on imports for almost 80 percent of its oil requirements, has faced difficulties finding banks willing to transfer payments to Iran since the Reserve Bank of India in December 2010 dismantled a mechanism to settle trade in euros and dollars.
Transactions are now routed through Ankara-based Turkiye Halk Bankasi AS (HALKB), which has told Indian refiners it may no longer be able to act as an intermediary when European Union sanctions take effect in July, four people with knowledge of the matter said Jan. 10.
India’s government-run UCO Bank (UCO) has been approved to be used by Indian refiners to deposit as much as 45 percent of crude payments in rupees, which will then be transferred to Iran, people with knowledge of the matter said March 28.
A Mumbai branch for Parsian would have made such transactions easier and may have helped skirt U.S. sanctions, the two people said today.