SBI to stop handling Iran oil payments
State Bank of India (SBI) largest public sector bank in India has informed Oil companies that it will not handle payments for crude from the Middle Eastern nation from November, Indian Oil Corporation Financial Head AK Sharma said on Friday. This will reduce oil imports from Iran after August. SBI has not yet responded on the issue.
“(Oil) loading will be affected from end-August under the current mechanism unless a new payment route is established,” IOC’s A.K. Sharma told to reports.
After China, India is the largest oil importing country since Iran. State-owned oil companies buy oil from Iran through SBI and German-based European-Iranian Hendlesbank AG (EIH). SBI recently informed the oil companies that these transactions will not be made from November. This can result in oil imports.
Reliance Industries has already said that it is hoping to stop the importation of oil from Iran. On the other hand, Naira Energy has announced it will cut oil imports from Iran, from this month.
The recent times, It is already known that the US withdrew from the international nuclear deal with Iran. Furthermore, the US says it will implement restrictions on that country. The South Asian countries have said that they will not obey the US sanctions on Iran. But the companies and banks that have a relationship with the American economy need to follow these restrictions. Otherwise, they will have to pay the penalties. SBI’s latest decision has been made in this context.
Iran offers Indian refiners a 60-day credit period on oil sales, which means payment for cargoes loaded from end-August will be due in November.