UCO Bank is the only designated Indian bank to have accounts through which payments for oil imports from Iran and exports from India are settled, which gives rise to some added liquidity for the bank, exclusively available to it.
Following the controversy over its Iran account leading to prodding by regulator Reserve Bank of India (RBI), state-run UCO Bank has completely revamped supervision of its Iran Vostro account through implementation of dedicated software and systems, getting rid of ordinary accounting package.
"Iran Vostro management software migration of legacy data has been completed in the new package. All the modules have been made live and treasury branch is using both the systems in parallel before closing the legacy Excel package," UCO bank said in a disclosure.
UCO Bank is the only designated Indian bank to have accounts through which payments for oil imports from Iran and exports from India are settled, which gives rise to some added liquidity for the bank, exclusively available to it.
UCO Bank's Iran account had earlier come to the news for all the wrong reasons when the Enforcement Directorate (ED) started probing transactions to detect select cases of advance payments made to Indian exporters over possible misuse of Foreign Exchange Management Act rules. This forced RBI to come up with stricter regulations.
UCO Bank negotiated 552 export bills amounting to Rs 3408 crore cumulative during 2014-15, with export credit outstanding as of end-March on account of Iran trade being Rs 385 crore, the Kolkata-headquartered bank has said.
This comes after the last disclosure made by minister of state for commerce and industry Nirmala Sitharaman that the balance in Iranian commercial banks' accounts with UCO was $2.86 billion or about Rs 17,895 crore as of March 16.
With oil price slide, Iranian deposits with UCO have dwindled, coming down from a peak of Rs 23,000 crore.
UCO has been developing the software solution for over a year to manage and monitor Iran dealings, officials said, starting with strict adherence to norms for applicants, beneficiaries as well as users creating separate modules for Letter of Credit among others.
The execution of Iran dealings involves a complex process as only specific set of operations conforming to strict regulations including those under Office of Foreign Assets Control Regulations of US department of Treasury are only allowed.
Indian exporters are allowed to receive payments against exports in Indian rupee by way of debit to the non-resident rupee Vostro account of only four Iranian banks: Parsian bank, EN bank, Saman bank and Bank Pasargad.
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