India to change settlement mechanism for Iranian crude imports

13:23, December 31, 2010      

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India's petroleum and finance ministry are working out an alternate settlement mechanism for Iranian crude imports, after the Reserve Bank of India (RBI) said Indian companies cannot use the Asian Clearing Union (ACU) to settle dues with Iran any more, reported the Indo-Asian News Service Thursday.

Indian Petroleum Secretary S. Sundareshan was quoted as saying that officials of RBI and the Iranian central bank would meet in Mumbai Friday to discuss alternate mechanism payments, which could be "in any currency".

The Tehran-based ACU, comprising Iran, India and seven other countries, settled payments for intra-regional transactions among the participating central banks on a multilateral basis.

In order to avoid U.S. sanctions, Indian companies had been using the ACU for payment exchanges.

The RBI said last week Indian companies would be allowed to settle current account and trade transactions with Iran only outside the ACU.

India is Iran's second largest importer of crude, having bought 21 million tons in 2009 to 2010 fiscal year which ended in March

On Wednesday, the U.S. had praised the RBI's move to reduce dealings with Iran's central bank, according to the report.

Source: Xinhua
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