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Rediff.com  » Business » Turkish bank unable to process India payments for Iran oil

Turkish bank unable to process India payments for Iran oil

December 12, 2013 11:26 IST

Turkey's state-run Halkbank can only resume processing Indian oil payments to Iran once Western sanctions are officially lifted following an interim deal in Geneva last month, a senior Halkbank official said on Wednesday.

"If the deal signed in Geneva becomes official, we could resume processing Indian oil payments to Iran," Hakan Aydogan, head of Halkbank's foreign operations department told reporters.

"Despite the breakthrough, the positive developments, there has not been official progress in this," he said.

Six world powers and Tehran reached an interim deal in November that provided limited relief to Iran from economic sanctions in exchange for curbs to Tehran's nuclear programme, opening the way for some oil payments to resume.

Indian and Iranian officials are meeting this week to discuss how to unlock the first oil payments to the Islamic Republic since that agreement.

The deal is a chance for Iran's new leadership to revive the country's economy, plagued with high inflation and a weakened currency since being cut off from the global financial system after sanctions were imposed in 2012.

The West believes Iran is trying to make nuclear weapons, while Iran says its nuclear programme is for power generation.

India started settling 55 percent of its payments for its purchases of Iranian oil in euros through Halkbank in mid-2012. The rest was settled in rupees through India's UCO Bank.

But the Halkbank route was halted in February this year when new sanctions prevented Iran from repatriating cash earned from oil it has been able to sell, choking off the biggest revenue stream to its economy. 

(Reporting by Evrim Ergin; Writing by Humeyra Pamuk)

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