TEHRAN – India has approved a proposal from Iran’s Bank Pasargad to open a branch in Mumbai, Indian Express reported on Saturday.

This decision comes amid the U.S. announcing sanctions and asking other countries to minimize oil purchases from Iran.

According to the report, the Federation of Indian Export Organizations (FIEO) had earlier approached the Reserve Bank of India (RBI) suggesting that they should allow the entry of Iranian banks into India to facilitate bilateral trade.

Sources said two banks from Iran, Bank Pasargad and Parsian Bank, had applied to set up maiden branches in India, while another Iranian lender, Saman Bank, had sent an application to set up a representative office. The government has so far cleared only the Tehran Stock Exchange-listed Bank Pasargad’s proposal for a branch in Mumbai, while the other Iranian banks’ plans are yet to get the green light, sources said.

The presence of an Iranian bank in India will open up a significant financial channel that will ensure the smooth flow of funds between the two countries. India imports a large quantity of oil from Iran and has committed an investment of $500 million for the development of the crucial Chabahar port.

EF/MA