Home Min bars three Iranian banks from opening India branches
- Moga molestation case: Family refuses to cremate victim, seeks cancellation of bus firm's permit
- Ramdev rebuts Opposition, says his medicine doesn't promise male child
- Economic policy 'directionless', minorities anxious: Shourie on Modi government
- Six Baltimore officers face murder charges in black man shooting
- 'All of a sudden, I saw light': Nepal earthquake survivor recounts rescue
India's attempt to corner the Iranian market while settling oil trade with the Middle East country has hit a wall with the Home Ministry declining permission to three Iranian banks to open branches in India.
The Ministry of Home Affairs, last month, denied security clearance to applications by Parsian Bank, Bank Kasargad and Eghtesad-e-Novin Bank fearing threat of money laundering and terror financing in banking transactions as cautioned by the Financial Action Task Force (FATF), said a ministry official.
"NOC (no objection certificate) was denied based on the FATF regime on Anti-Money Laundering and Terrorist Financing while following the due process of granting clearance to Iranian banks to open branches in the country," he said.
An official of the Department of Economic Affairs said that it plans to approach the MHA again citing "strategic compulsion" for opening of these branches. However, no application has been sent so far to the MHA, he added.
India became a member of Paris-based FATF in 2010. As a member, India is required to follow standards prescribed by FATF to check money laundering and terror-financing activities.
India, which plans to import 15.5 million tonnes of crude oil from Iran this year, has faced difficulty in finding banks to transfer payments to Iran ever since the Reserve Bank of India in December 2010 dismantled the 1974 Asian Clearing Union mechanism. Transactions are now routed in euro payments through Turkiye Halk Bankasi and 45 per cent of crude payments in rupees through UCO Bank. Rupee payment was put in operation after a circular from the finance ministry last June to waive "withholding tax" for transactions with Iran.
Since then, Bharat Petroleum Corporation Ltd and Mangalore Refinery & Petrochemicals Ltd have started paying in rupees while Essar Oil Ltd is expected to shift from the euro this week. Indian Oil Corp has no shipment scheduled until September. Indian officials said local branches of Iranian banks would have helped skirt US sanctions and made transactions easier for Indian firms to boost exports of rice, tea, yarn, textiles and fertilisers, and project exports.