Mumbai: The Reserve Bank of India is holding discussions with Tehran on modalities of payment of reported dues of USD 6.5 billion for oil imports, RBI Governor Raghuram Rajan on April 5 said.
"We are discussing with them (Iran) the way they want to be paid and certainly, we will work with them on when and how we pay them. I don't think it will happen as a lumpsum. It is going to be staggered," Rajan said during the customary post-policy call with analysts.
He, however, did not disclose the quantum of payments to be made to the Middle East country, which is getting ready for a life post sanctions. Indicating that the commitments will be honoured, Rajan said meeting the payment should not be a concern as the country has over USD 350 billion in its forex kitty at present.
In August 2015, a central government official had said RBI will be assisting Indian refiners to clear over USD 6.5 billion of past dues they owe to Iran for crude oil purchases. The central bank, which previously facilitated payment of oil import bill to Iran, had agreed to help in creating the payment channels to clear the past dues.
The then finance secretary Rajiv Mehrishi had led a four member delegation to Tehran in July 2015 to discuss modalities of clearing the dues. After the US and western powers in 2011 blocked payment channels in a bid to bring Iran to the negotiating table over its controversial nuclear programme, RBI had facilitated oil payments to Iran via Turkey.
Iran and six world powers last year sealed an accord to curb the Islamic Republic's nuclear programme in return for ending sanctions. The lifting of sanctions is expected to open up banking channels for Tehran. India is keen that repayment of dues since February 2013 should be done in a staggered manner so as to avoid a run on the rupee.
Since February 2013, Indian refiners like Essar Oil and Mangalore Refinery and Petrochemicals (MRPL) have been paying 45 per cent of payment dues on purchase of crude oil from Iran in rupees through Uco Bank, Kolkata.
The remaining has been accumulating, pending finalisation of a payment mechanism. They had last year paid nearly $3 billion in six instalments through a limited payment channel following start of nuclear talks between the West and Iran. The outstanding has since climbed to over USD 6.5 billion.
