Banks asked to furnish proposals for transactions with Iran

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ISLAMABAD, June 28 (APP): Minister for Commerce, Engineer Khurram Dastgir Khan Tuesday directed the representatives of banks to furnish viable proposals for the facilitation of banking transactions for trade with Iran within a month.

The Minister was chairing a meeting with State Bank of Pakistan (SBP) and private banks for exploring the banking channels available for trade with post-sanction Iran.

The Minister said that Pakistan is searching for ways and means to initiate trade with Iran in a big way despite the fact that several impediments persists after the lifting of sanctions from Iran.

The meeting was informed that despite lifting international sanctions from Iran, private banks are reluctant to establish direct banking channels with Iran.

The absence of banking links, because of the refusal of international banks to support transactions with Iran, is the prime reason that Pakistan’s trade with Iran did not boost up as expected.

Representatives of Pakistani private banks visited Iran few months ago and report a great enthusiasm in Iran regarding trade with Pakistan.

SBP and Central Bank of Iran signed a Letter of Intent on the occasion of visit of Iranian President to Pakistan for enhancing mutual cooperation and establishing direct banking links.

Pakistani traders would have great opportunities of export right next door with minimal transportation cost, especially that of Basmati rice which used to fetch millions of dollars from the pre-sanction Iran.

Pak-Iran trade which was over one billion dollars now stands at US $ 270 million because of the international sanctions.

Ministry of Commerce is extensively engaged with the Ministry of Trade and Industry and Ministry of Agriculture of Iran to operationalize the Preferential Trade Agreement (PTA) and enhance trade facilitation at the border.

The Minister recently visited Pak-Iran border at Taftan and inspected the facilities available for smooth movement of vehicles trading across the border and promised to upgrade the infrastructure.

As per the 5-Years Economic Engagement Plan agreed between Pakistan and Iran, the Ministry of Commerce of Pakistan has forwarded the draft FTA framework agreement to Iran this month. The response of Iran is awaited on this.