India will pay Iran $ 1.65 billion through the UAE central bank to clear over 40 per cent of the backlog payments for oil imports.
Since February 2013 when US blocked payment channels, India has been paying 45 per cent of its Iran oil bill in rupees through a Uco Bank branch in Kolkata. For the rest, it has been waiting for a payment channel.
As much as $ 4 billion has been accumulated in past dues. A payment mechanism is now in place under which $1.65 billion in three equal instalments of $ 550 million each will be transferred to Iran via the UAE central bank, senior Government and industry officials said.
Under the two-stage payment mechanism worked out, Indian refiners, in proportion to their dues, will make rupee payment to the Uco Bank. This money will be transferred to the RBI for onward credit to the central bank of United Arab Emirates.
The UAE central bank will then make payments in dirhams to Iran.
Officials said the first two instalments may be paid this month and the third $550 million tranche by July 20 deadline set by the US and five other world powers for Iran to receive part of its past payments from its oil buyers.