(It isn't known if the US Treasury told the RBI it was about to have serious problems!) The RBI then announced it would cease to make any payments to Iran under the Asian Clearing Union
RBI had said last month that all trade-related payments with Iran had to be cleared outside the Asian Clearing Union
, a clearinghouse through which most India-Iran trade was being conducted.
The study also stressed the need to discuss if there is still a need to expand the membership of the Asian Clearing Union
-- established in 1974 under the auspices of the (Tehran-based) Economic and Social Commission for Asia and the Pacific (ESCAP) -- or whether a new East Asian Clearing Union
should be established.
The Asian clearing union
is discussed in Chapter 6.
operational, including opening of the CBI accounts in Pakistani Central Bank,rejoining of Iran to Asian Clearing Union
(ACU), which is an important progress,and the establishment of a joint banking committee by the two countries comprisig several Iranian and Pakistani banks.
Meanwhile, Vikramjit Singh Sahney President SAARC Chamber of Commerce and Industry has called upon the leadership of South Asia to form a "South Asian Clearing Union
" to augment trade,investment flow for viable financial cooperation besides accelerating the pace of development of in the region.
With Reserve Bank of India in December 2010 scrapping a mechanism of settling payments through the Asian Clearing Union
route, India has been paying 55 per cent of the value of oil imports from Iran in euros through Turkey's Turkiye Halk Bankasia.
$ 700 million was paid to Asian Clearing Union
(ACU) by government in import bill, depleting the reserve in the first week of the month.
After RBI scrapped a long-standing mechanism of settling payments through the Asian Clearing Union
mechanism, India pays 55 percent of the value of oil its imports from Iran in euro payments through Turkey's Turkiye Halk Bankasia.
India has generally been considered friendly toward Iran, and many experts were surprised when India's central bank, in late December 2010, announced that it would no longer use a regional body, the Asian Clearing Union
, to handle transactions with Iran.
"The RBI will place 2.5 billion that India owes Iran under the previous ACU (Asian Clearing Union
) payment regime as initial corpus in the rupee accounts of the Iranian Central bank BMJI," the official said.
The dispute erupted in December after India's central bank scrapped payments through the Asian Clearing Union
(ACU), winning praise from Washington.