FinMin rejects Iran plea to set up bank branch in India

The Finance Ministry has declined permission to Iran’s Parsian Bank to open a branch in India apparently due to security concerns and threat of money laundering.

Iran had been pressing New Delhi for allowing Parsian Bank to open a branch to settle oil and other trade with India.

The matter was examined by Reserve Bank of India, and subsequently, based on RBI’s report, a decision was taken by the Finance Ministry not to agree to Parsian Bank’s application, sources privy to the development said.

Sources said since RBI in December 2010 scrapped a long-standing mechanism of settling payments through the Asian Clearing Union mechanism, India pays 55 per cent of the value of oil its imports from Iran in euro payments through Turkey’s Turkiye Halk Bankasia. The balance 45 per cent of crude payments are made in rupees through UCO Bank.

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