New Delhi: In the wake of the sanctions imposed by the US on Iran, India has found an old and trusted alternative route to route money to Tehran for its oil purchases. It will now use escrow accounts of five Iranian banks held with UCO Bank to deposit payments for the bills incurred, sources said. Part of the accumulate Indian currencies will be used by Iran to purchase essential goods from India and to meet the expenses of its diplomatic missions in South Asian nation, sources familiar with the matter said.
Payment into escrow accounts will reduce the chance of Iranian bank accounts getting blocked in case the US brings new banks under sanctions, the people cited above said. UCO Bank Managing Director Atul Kumar Goel said on December 20 that Iran has 15 bank accounts with their organisation, out of which five are facing secondary sanctions. The rest are eligible for bilateral trade between India and Iran.
Goel added that the move will help UCO Bank by boosting its CASA and profitability. The last time when sanctions had been imposed, UCO Bank had been used to route payments to Iran for oil purchases.