The Reserve Bank had previously facilitated payment of oil import bill to Iran.
India will begin paying over $6.5 billion of past oil dues to Iran in tranches from this month, with the first instalment of up to $1.4 billion being finalised.
"Shortly there will be some part payments. Government is working out modalities and the quantum," IOC Director (Finance) A K Sharma said here on Thursday.
RBI will help create payment channels to clear the past dues. "We will make dollar payments to RBI which will transmit it further," he said. "We are waiting for instructions to make payments."
The Reserve Bank had previously facilitated payment of oil import bill to Iran.
After the US and western powers in 2011 blocked payment channels in a bid to bring Iran to the negotiating table over its controversial nuclear programme, RBI had facilitated oil payments to Iran via Turkey.
"We do not know yet how much instalment will be paid but our share I believe should not be more than $60-70 million," he said.
Since February 2013, Indian refiners like Essar Oil and Mangalore Refinery and Petrochemicals (MRPL) have been paying 45% of payment due on purchase of crude oil from Iran in rupees through Uco Bank, Kolkata.
The remaining has been accumulating, pending finalisation of a payment mechanism. They had last year paid nearly $3 billion in six instalments through a limited payment channel following start of nuclear talks between the West and Iran.
The outstanding has since climbed to over $6.5 billion.
Essar Oil owes $3.34 billion, MRPL $2.49 billion and IOC $581 million to Iran.
RBI representative was part of a four-member delegation led by Finance Secretary that visited Tehran on July 25 and 26. Iran and six world powers last month sealed an accord to curb the Islamic Republic s nuclear programme in return for ending sanctions.
Lifting of sanctions would open up banking channels and Tehran is likely to seek past oil dues. India is keen that the repayment of dues that have accumulated since February 2013, be done in staggered manner so as to avoid a run on the rupee.
The official said RBI will detail out the banking channels as well as payment schedule with its Iranian counterpart.
HPCL-Mittal Energy Ltd (HMEL) owes $97 million and Hindustan Petroleum Corp Ltd (HPCL) another 29 million.
Besides, about Rs 17,000 crore was lying in Iranian account with Uco Bank. India is keen that Iran continues to give Indian refiners favourable terms - like insurance and shipping as well as 90-day credit period, on oil it sells to India, its second biggest customer after China.
Under US pressure, New Delhi has restricted import of Iranian oil at 11 million tonnes in past two fiscals. But with easing of sanctions, it will look to increase imports provided Tehran continues to extend the fiscal terms.
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