Iran to open rupee accounts in Indian banks for payments

New Delhi: In a fresh initiative to resolve all aspects of a contentious issue regarding payments for imported oil, Iran's central bank has decided to open accounts with two Indian banks through which it will receive part payment for oil imported by this country. It will then use that money to pay for Indian exports, reports suggest.

According to reports now circulating, Indian oil firms will pay 20 per cent of their import dues to Iran through rupee accounts in India's state-run IDBI Bank Ltd and the UCO Bank.

The accounts would be used to pay for half of India's oil and non-oil imports from the Islamic Republic, reports suggested.

So far concerned ministries in the government have declined comment.

India and Iran have struggled to find a conduit through which to clear accumulated debts arising from import of Iranian oil.

Last December India's central bank suspended a regional clearing house mechanism which successfully blocked overt routes to clear payments for bilateral trade. The bank made its move in consonance with the terms of UN sanctions on Iran.