file photo shows India's UCO Bank[/caption]The Kolkata-based state-run lender had released Rs 945.9 cr to the current accounts of eight companies for the purpose.
UCO Bankon Wednesday said it does not expect any impact on its performance because of theadvance remittancesit offered for conducting future exports to Iran.
The Kolkata-based state-run lender had released Rs 945.9 crore to the current accounts of eight companies for the purpose.
No credit facilities were given to the companies...Therefore the events will not have any material impact on operation or performance of the bank, since no credit facilities were given by the bank to these companies and the exporter is under obligation as per Fema (Foreign Exchange Management Act) to export within one year, the lender said. The bank also clarified that the Enforcement Directorate (ED) had sought the information related to a few accounts maintained under Iran rupee payment mechanism and also statistics on the trade.
These accounts are cases where advance payments have been received and exports have not taken place. We have provided the information to the Enforcement Directorate. We are yet to hear from the Enforcement Directorate in this matter, UCO Bank said.
The bank's comments come at a time when news reports claimed that a probe was being conducted into suspected misuse of up to $3.2 billion in export advances paid out by UCO Bank.
On Monday, theReserve Bankof India (RBI) asked commercial banks to efficiently follow up with exporters to ensure performance of orders, including shipment in case of goods, within a stipulated period. The banking regulator directed lenders to run checks on clients and ensure compliance with KYC (know your customer) and anti-money laundering rules. It suggested that doubtful cases and clients who are chronic defaulters should be referred to ED.
UCO Bank had set up a rupee payment mechanism, with the support ofRBIand the government, to ensure continuous purchase of crude oil from Iran. Under this mechanism, a few Iranian banks have opened Indian rupee account with UCO Bank.
Some of the payments in these accounts are advance payments against future exports. Where payment is released as an advance against future exports, the exporter is under obligation according to Fema to export within one year from the date of receipt of advance remittance.
All the payments are in Indian rupees and no foreign currency is involved. The payment is from the deposits of the Iranian bank available with our bank and no credit facility is involved, UCO Bank said.
By Business Standard
