Friday, January 7, 2011

SBI refuses to issue LCs for Iran oil

New Delhi: Days after RBI clamped down on the main conduit Indian companies use for paying Iranian oil, SBI has refused to facilitate payments through an alternate temporary channel, a move that can potentially halt import of oil from Iran. 
   SBI has refused to issue fresh letters of credit (LCs) to public and private sector refiners who import some 12 million barrels of crude oil from Iran every month, an official with the nation’s largest lender said.
   “There are uncertainties involved. We need to be sure about the payment mechanism,” the official said after a meeting called by finance ministry to discuss the row.
   In absence of LC, which is a letter from a bank guaranteeing the buyer’s payment to seller on time and for the correct amount, one cargo for HPCL is stuck at Iranian ports. AGENCIES

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