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The month-long impasse over payment for crude oil supplies from Iran was resolved on Thursday.
A high-level meeting held here decided that the payments will now be made in euro through a German bank.
It has also been decided that the State Bank of India (SBI) will clear over $2 billion of backlog payment immediately, official sources told Business Line . SBI will route payments in euro to the National Iranian Oil Co's account in Hamburg-based EIH Bank, they added.
Further, the Indian Government will also certify every transaction as a bona fide payment towards oil imports from Iran and that the money is not being used by Iran for its nuclear programme.
The crisis erupted with the Reserve Bank of India in December disallowing payments for Iranian crude using a long-standing clearing house system, run by the central banks of Asian countries including India and Iran. This created a backlog in payments.
Iran is India's second biggest crude oil supplier. India imports about 400,000 barrels per day of oil from Iran. The worst affected by the impasse was Mangalore Refinery and Petrochemicals Ltd (MRPL).
MRPL, which has a capacity to process 11.8 million tonne per annum (mtpa) of crude oil, meets over 50 per cent of its crude oil requirement from Iran, sourcing about 7.1 mtpa.
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