India opts for rupee payment for Iran oil; UCO Bank reluctant to route fund

The Trump administration had withdrawn from a nuclear accord signed by Barack Obama in the month of May and had ordered first round of sanctions on Iran from August 6

The Union government on Friday decided to settle payments for Iranian oil in rupee through the Mumbai branch of an Iranian bank. This comes close on the heels of the Kolkata-based UCO Bank expressing reservation in facilitating the payment to Iran, even as the finance ministry rejected the proposal to use IDBI for such transactions.

The decision to make payment in rupee instead of dollar was taken after a meeting of an empowered group of ministers headed by finance minister Arun Jaitley on Thursday. India cannot use the existing payment mechanism since the United States under Donald Trump has opted for