India to pay for Iran's oil via rupees through UCO Bank

New Delhi: Iran has agreed to accept 45 percent of the payment for its oil exports to India in rupees through UCO Bank, based in Kolkata, the Indian Express newspaper reported on Thursday, without citing any sources.

India, Iran’s second-biggest oil client after China, buys 12 percent of its oil needs from the Islamic nation, worth about $12 billion annually.

Last month, it was reported that India would pay for some of its oil imports in rupees via an Indian bank, resorting to the restricted currency after more than a year of payment problems in the face of fresh, tougher US sanctions.The decision was arrived at last month after talks aimed at ensuring stability in payments between the two nations.

The payment will be deposited in two private Iran banks, which are free of the sanctions imposed

Iran’s supplies to India have been fraught with payment problems in the last 13 months after a clearing mechanism was scrapped and refiners have sought alternative supplies.

India now pays for its daily imports of 350,000-400,000 barrels from ran through Turkey’s Halkbank .

Two Iranian banks have applied toReserve Bank of India to open branches in the country, it added.

Reuters