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"Indian media say the country's major oil companies have paid the first installment of outstanding oil dues to Iran. The payment of the installment at a total value of $700 million was made by Essar Oil, Mangalore Refinery and Petrochemicals (MRPL) and other Indian refiners on Wednesday. Essar Oil paid $335 million while MRPL paid about $300 million. The remainder of the payments was made by HPCL-Mittal Energy (HMEL) and Hindustan Petroleum Corp (HPCL)... According to what Iran and the P5+1 agreed in July, the US Treasury's Office of Foreign Assets Control (OFAC) would approve the banking mechanism for payment of $1.4 billion by Indian refiners in two equal installments to Tehran. The Indian media say the refiners had deposited the rupee equivalent of $700 million in Kolkata-based UCO Bank which transmitted the money to the Reserve Bank of India (RBI). The RBI will accordingly make arrangements for its onward remittance to Iran." (Press TV, "India pays first batch of Iran oil dues," 10/1/15)
"India has asked Iran to provide financial guarantees before Delhi continues to allow vessels with Iranian insurance cover to enter Indian waters, the latest sign of difficulties Iran is facing in exporting oil…India's latest request, however, shows the struggle OPEC member Iran still faces in maintaining steady oil shipments. International sanctions on Iran have made it difficult to insure refineries and ships involved in trade with Iran and forced India to settle 45 percent of oil payments in rupees through state-owned UCO Bank while refiners are withholding the remainder…India's Deputy Nautical Advisor, Deepak Kapoor, sent the letter to Iran's Economic Affairs and Finance Ministry on Dec. 10 ahead of a renewal of approval to the Iranian underwriters on Dec. 27. India imported 47 percent less oil from Tehran in October from a year ago, helping New Delhi get a six-month waiver from the U.S. sanctions in December. At the end of November Indian refiners owed about $2.2 billion for partial payments to Iran, while about $3 billion worth of rupees paid by refiners is lying in Tehran's account with UCO Bank. India has asked Iran to provide a bank guarantee for 23 billion rupees ($369.98 million) from its account with UCO Bank as 'a precautionary measure to cover any potential claims that may arise due to maritime incident in Indian waters'…An early submission of a bank guarantee would enable India's shipping ministry to consider further extension of conditional authorisation to Moallem Insurance Co and Kish P&I Club beyond Dec. 27 and promote bilateral trade, the letter said." (Reuters, "India seeks Iran's financial guarantees for ships -letter," 12/17/13)
"An obscure Indian bank has been an unlikely beneficiary of Western sanctions against Iran, handling billions of dollars from frozen oil payments that boosted its interest margins, but is now having to prepare itself for life after the windfall. UCO Bank, a Kolkata-based state lender that had been among India's poorer performers, saw revenue and profits surge after it was picked in 2012 to hold rupees for oil payments to Iran, a pile that has grown to more than $3 billion. Late last month, Iran and six world powers reached an interim deal to curb Tehran's nuclear programme in exchange for limited sanctions relief. 'The Iran business was a shot in the arm for us,' UCO Chairman Arun Kaul told Reuters. 'Still, scope for improvement is very large. We had become a marginal player in the banking industry, we are coming back now'…India has cut back sharply on purchases of Iranian oil in order to qualify for a waiver from U.S. sanctions, but has remained a major importer under an arrangement in which Indian buyers pay for Iranian crude in part by depositing rupees at UCO Bank. The rupees are used to pay Indian exporters to Iran against letters of credit opened by Iranian private banks. UCO is able to take advantage of the time lag between imports and exports, and the fact that the oil dues greatly exceed the value of shipments of Indian goods to Iran. The funds are especially valuable because Indian banks do not pay interest on current account deposits but can lend them to other customers. UCO's cost of deposit, the interest that the bank pays on its overall deposits, at end-September was 6.09 percent - among the lowest in the industry, while it earned 10.04 percent on loans in the same period. In comparison, cost of deposit for rival Oriental Bank of Commerce (ORBC.NS) was 7.65 percent. UCO Bank posted a four-fold annual jump in September quarter earnings while net interest income grew 55 percent. Total assets increased 30 percent to 2.12 trillion rupees at end-September from 1.63 trillion rupees in March 2011. At around $3 billion, Iranian oil receipts account for roughly 12 percent of UCO's total deposits, according to Reuters calculation based on data on the bank's website." (Reuters, "UCO Bank looks to life after Iran sanctions windfall," 12/4/13)
“Iran will receive $4.2 billion from its oil sales to be transferred in instalments if it fulfils its commitments in a landmark nuclear deal struck between world powers and Tehran in Geneva. Here is a look at where Iranian oil payments are held in the countries in Asia that are still importing crude from the OPEC producer…
BANK: UCO Bank
ESTIMATED AMOUNT: About $5.3 billion held up by the sanctions. Of the total, about $1.8 billion is with the oil companies that have bought crude from Iran and the remainder is held with state-run UCO Bank. In mid-October, the National Iranian Oil Company (NIOC) had asked Indian refiners to pay in euros via Turkey's state-owned Halkbank. (Reuters, “FACTBOX-Iran's oil fund stash in Asia,” 11/25/13)
"The move is aimed at fuller utilisation of the rupee payments accumulated in India’s UCO Bank for oil purchased from Iran... The payment mechanism allows payments for Iranian oil to be deposited in India’s UCO Bank in Indian rupees. The money is then used to make payments to Indian exporters thereby avoiding payments in dollars and through foreign banks." (The Hindu, "India allows re-export of importanted products to Iran," 6/10/2013)
"State-run Hindustan Petroleum (HPCL) has made its first payment for Iranian oil in rupees to partially settle its bill for a cargo imported in May, company officials said on Friday, a move that will help New Delhi fix its trade imbalance with Tehran . . . India is Iran's second-largest oil buyer, but has struggled to find ways to pay for the oil as Western sanctions curb international financial payments destined for Tehran. The two countries agreed in January to settle 45 percent of the oil trade in rupees. The balance of HPCL's payment, made on Friday, was through Turkey's Halkbank and India's UCO Bank. 'This is the first payment we have made since the gate was opened...we have paid 45 percent in rupees and 55 percent through Halkbank,' B. Mukherjee, head of finance at HPCL, told Reuters. Since July 2011, refiners in India have been using Halkbank to pay their annual oil import bill of more than $10 billion, after a previous payment channel was blocked in December 2010 . . . HPCL has paid 2.75 billion Indian rupees ($49.25 million) to Iran through UCO Bank and $60 million through Halkbank, a company source privy to the matter said." (Reuters, "India HPCL begins rupee payment for Iran oil," 3/8/12)
"India, after much delay and uncertainty, is ready to move ahead with a rupee payment mechanism designed to bypass U.S sanctions on trade with Tehran, a senior industry executive said Wednesday.
Under the move, Indian oil companies that import crude oil from Iran will deposit the payments into rupee accounts held in UCO Bank, and these funds will be used by Iran to pay for agricultural products and medicines from India...Payments can be made now that the exemption has been signed into law, Mr. Ahmed said. He said a total of about $4.5 billion could eventually flow into the rupee account, although he didn't provide a time frame for this…Iran accounts for a significant share of India's crude imports, with the later arguing it needs Iranian oil to meet its growing energy demand.
Under U.S. pressure, New Delhi has cut back on purchases from Iran to about 9% of its total oil imports from 12% last year, pushing Iran to the fourth position as a supplier from the second position it held earlier.
Mr. Ahmed said Indian goods worth $500 million to $600 million would be shipped to Iran two to three months after the rupee payment mechanism is activated. 'Iran is a very promising market. The demand [from Iran] and supply from India is ready, so we had to make it happen,' he said.
Of this, 65% to 70% will be agricultural products and the rest pharmaceuticals, he said." (Wall Street Journal, "India Clears Iran Payments Move," 6/20/2012)
"Indian refiners are waiting to make payments into the account at UCO Bank until New Delhi implements a planned exemption for them from a hefty local tax, which was announced in March and can take up to 60 days to be put into effect . . . Parsian's Tehrani said Iran had offered to deposit about 10 million euros ($12.5 million) in the bank's account with UCO bank to settle the dues of Indian exporters. 'Unfortunately they (New Delhi) did not accept our request,' he said. 'We have LCs worth 20 million rupees under negotiation with UCO Bank, but it's been over a month and we have not got a payment,' said Pankaj Bansal, a partner at engineering goods maker TMA International." (Reuters, "Iranian bank halts guarantees for India imports," 6/12/12)
"Iran's Parsian Bank has opened a credit window in India's UCO Bank Ltd. to facilitate payments for Indian exporters in rupees, Federation of Indian Export Organizations said Friday. 'The payment problem with Iran has been resolved (for exports from India) with the rupee payment mechanism through UCO Bank becoming operational,' M. Rafeeque Ahmed, FIEO's president, said in a statement." (Wall Street Journal, "UCO Bank to Facilitate Export Payments From Iran," 3/2/2012)