India to allow payment for Iranian crude through German bank | business | Hindustan Times
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India to allow payment for Iranian crude through German bank

business Updated: Feb 03, 2011 16:37 IST
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Ending weeks of uncertainty, India decided to pay for Iranian crude oil in euro through a German bank based in Hamburg, a finance ministry official said on Thursday.

The conduit (route) was decided at a high level meeting chaired by National Security Advisor Shiv Shankar Menon.

"State Bank of India (SBI) has been instructed to clear over $2 billion of backlog payment beginning this evening," the official said.

The meeting was also attended by Economic Affairs Secretary R Gopalan, Foreign Secretary Nirupama Rao and Oil Secretary S Sundareshan.

SBI will route euro payments to National Iranian Oil Co's account in the Hamburg-based Europäisch-Iranische Handelsbank AG (EIH Bank).

The official said over $2 billion payment is pending since September and another USD 1.3 billion is outstanding since December 23.

This is when the Reserve Bank of India (RBI) disallowed payments for Iranian crude using a long-standing clearing house system, run by the central banks of nine countries --including India and Iran-- dubbed as the Asian Clearing Union.

India imports 12 million barrels of crude oil every month from Iran. Iran accounts for 12% of India's supplies and is its second-largest supplier behind Saudi Arabia.

Iran had continued to supply crude oil to India on credit after the RBI move, the official said.