The Hindu Business Line : Allow Iranian banks to open in India: CII

IN an effort to help the Indian business community further increase exports to Iran, the Confederation of Indian Industry (CII) has urged the Indian Government to consider giving permission to an Iranian bank to open an office in India without insisting on reciprocity for an Indian bank to open there.

CII officials told Business Line that Indian companies doing business with Iran feel that the presence of an Iranian bank here would ensure expeditious disposal of export proceeds.

Officials pointed out that the normal practice for allowing banks to set up an office is to follow the principle of reciprocity, thereby allowing Indian banks to be set up in Iran. However, the problem lies in the fact that Iranian laws do not permit foreign banks.

To get over this problem, CII has suggested that as a "special case" the Indian Government may consider giving permission to Iranian bank to be opened here.

The suggestion has been made on the eve of the two-day India-Iran Joint Commission meeting scheduled to begin in Tehran on December 13. In the recent past, there have been a series of high-profile visit from the two sides, with the Indian Prime Minister visiting Tehran and the Iranian President also coming to Delhi.

Besides, CII has also stressed on the need to make special efforts to "inform and convince" Iranian agencies that India produces goods of international quality at the most competitive rates.

Further, CII has said that if Indian contractors were to make headway in Iran in the area of projects, they would need financial support. While stating that this was an issue that required serious consideration, officials indicated that agencies such as the Exim Bank of India would be in a position to provide such a support.

Officials said that there are large projects in the oil and gas, petrochemicals and refining sectors, in which Indian companies have interest and feel confident.

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