Iran to India: Pay with Petro - Euros

Iran has asked India to pay back its debts to Iran via a new channel. Tehran requested New Delhi to pay the money that Tehran owes to third countries for the purchase of food, medicines and medical equipment.
With nuclear talks between Iran and P5+1 going slow, Tehran has approached New Delhi to pay the Iranian debts arising from the export of humanitarian goods from third countries in order to reduce the $3.6 billion accumulated balance on India's oil import account with Iran.
Last week, the Reserve Bank of India agreed that payments for third country exports to Iran could be made from the 55 per cent euro component of oil payment due to National Iranian Oil Company (NIOC) with UCO Bank acting as the correspondent bank.
UCO Bank would examine the letters of credit issued by Iranian banks for third country imports by Iranian firms and would advise the identified Indian oil importing refineries to remit the amount to the Iranian Bank. The due diligence would involve UCO Bank securing certification from renowned inspection agencies of the goods being humanitarian in nature. If there is any suspicion or doubt on any consignment, UCO Bank would be free to suspend the money. The payouts by each Indian refinery would be in proportion to their outstanding amount. NIOC would deduct the amounts from their obligations as soon as the payments are done.
Indian refiners Essar Oil, Bangalore Refinery and Petrochemicals Ltd, Hindustan Petroleum Corp and HPCL-Mittal Energy Ltd have been settling 45 per cent of payments in rupees, which Iran used for importing goods from India, while the refiners held the remainder.