India to allow payment for Iranian crude through German bank

New Delhi, Feb 3 (PTI) Ending weeks of uncertainty, Indiatoday decided to pay for Iranian crude oil in euro through aGerman bank based in Hamburg, a finance ministry officialsaid today.

The conduit (route) was decided at a high level meetingchaired by National Security Advisor Shiv Shankar Menon.

"State Bank of India (SBI) has been instructed to clearover USD 2 billion of backlog payment beginning this evening,"the official said.

The meeting was also attended by Economic AffairsSecretary R Gopalan, Foreign Secretary Nirupama Rao and OilSecretary S Sundareshan.

SBI will route euro payments to National Iranian Oil Co''saccount in the Hamburg-based Europ�isch-Iranische HandelsbankAG (EIH Bank).

The official said over USD 2 billion payment is pendingsince September and another USD 1.3 billion is outstandingsince December 23.

This is when the Reserve Bank of India (RBI) disallowedpayments for Iranian crude using a long-standing clearinghouse system, run by the central banks of nine countries --including India and Iran-- dubbed as the Asian Clearing Union.

India imports 12 million barrels of crude oil every monthfrom Iran. Iran accounts for 12 per cent of India''s suppliesand is its second-largest supplier behind Saudi Arabia.

Iran had continued to supply crude oil to India on creditafter the RBI move, the official said.