The RBI then announced it would cease to make any payments to Iran under the Asian Clearing Union
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.
He has also served as an alternate to the Governor on the Asian Clearing Union
The dispute erupted in December after India's central bank scrapped payments through the Asian Clearing Union
(ACU), winning praise from Washington.
6 billion by end January, 2011 without Asian Clearing Union
Until recently, Iran and India conducted their payments through the Asian Clearing Union
The Reserve Bank of India (RBI) is looking to ensure trade payments to Iran through channels available outside the Asian Clearing Union
, Dow Jones has reported, citing the central bank's deputy governor.
Although US sanctions do not cover oil sales, the Asian Clearing Union
system used by India and Iran for the trade had been criticised for making it difficult to monitor flows into Iranian organisations against which Washington has sanctions.
India buys about 400,000 barrels per day of Iranian crude, sending roughly $12 billion a year to Tehran via the Asian Clearing Union
, a system created in the 1970s by central banks in South Asia and Iran to clear trade payments between them.
India and Iran are both members of the Asian Clearing Union
(ACU), which was designed to promote trade by facilitating payments among the central banks of nine Asian nations: Iran, Pakistan, India, Bangladesh, Myanmar, Nepal, Bhutan, Sri Lanka and the Maldives.
Last week, the Reserve Bank of India (RBI) said deals with Iran must be settled outside the Asian Clearing Union
(ACU) system, used by central banks of member nations to settle bilateral trades.