New Delhi, Apr 29 (KNN) Industrial Development Bank of India (IDBI) has created Iran Trade cells in five Indian cities to facilitate business transactions for Indian exporters dealing with Iran.

According to a press release, IDBI bank has created trade cells in Mumbai, Kolkata, Delhi, Indore and Ahmedabad and is committed to offer good services and best pricing to Indian exporters.

IDBI bank, which had received nod to handle import-export transactions with Iran early March, has now commenced operations by creating Iran trade cells in 5 Indian cities where it has designated trade finance officers to facilitate business transactions for Indian exporters dealing with Iran.

The bank has also started receiving funds from Central Bank of Iran for export settlements of Iran, said PSVRSNRK Rai, Deputy General Manager of Trade Finance with IDBI Bank.

Upon obtaining permission from the Indian bank to handle import export transactions with Iran, the IDBI Bank has become the second bank to route the payments, after UCO Bank, which has been solely handling rupee payments till now.

Thanking the Indian Government and the trade organizations and individuals who gave their assistance in getting the mandate for Iran trade, Rai ensured his commitment towards easy funds allocation and direct settlement of export bills for exporters, including those dealing in rice and tea.

He said, “Communicadence India is pitching with Indian Government to create similar bilateral mechanism in INR with other countries with which banking route is presently not available or has become deactivated.”

If the Government takes interest through diplomatic channels, bankers would be more than willing to come forward to facilitate the transactions, he added.

According to the statement, India used to pay Iran, its third largest oil supplier, in euros using European banking channels. But this channel got blocked from November 2018, due to US sanctions.

US has given India May 2, 2019 as the deadline to stop all purchase of oil from Iran, a tough decision for India as it may result in large escalation of fuel prices. Whatever the decision, the export of essential commodities to Iran will continue even after May 2nd.

Besides this, he stated that Iran till date is India's third-largest oil supplier after Iraq and Saudi Arabia. It was India's second biggest supplier of crude oil after Saudi Arabia till 2010-11 but sanctions by the West over its suspected nuclear program relegated it to the seventh spot in the subsequent years.

In 2013-14 and 2014-15, India bought 11 million tonnes (MT) and 10.95 MT of crude, respectively from Iran. Bilateral trade between India and Iran increased to USD 13.8 billion in 2017-18 from USD 12.9 billion in the previous fiscal.

Bilateral trade between India and Iran increased to USD 13.8 billion in 2017-18 from USD 12.9 billion in the previous fiscal. However, India's exports were only worth USD 2.5 billion to Iran.