April 7, 2011 / 11:27 AM / 9 years ago

No solution yet to Iran oil fund row - India bank source

NEW DELHI, April 7 (Reuters) - No solution has yet been found to a dispute over how India could pay for Iranian oil imports, a source at the State Bank of India said on Thursday and a finance ministry official said the two sides were still exploring options.

Germany this week blocked an alternative route agreed by India and Iran using a bank based in the European country after a long-standing payment mechanism was scrapped by New Delhi in December under pressure from the United States.

India’s central bank said in December payments to Iran could no longer be settled using a clearing system run by regional central banks, winning praise from Washington, but putting at risk import of about 400,000 barrels per day (bpd) of oil.

Iran is India’s second biggest oil supplier after Saudi Arabia. Iranian supplies to India have not yet been hit.

A source at the State Bank of India , which had been involved in the payments through the German bank, said no solution had been found after a meeting on Thursday.

India is still exploring options to resolve Iran oil payments issues, R. Gopalan, secretary of economic affairs in the finance ministry told reporters.

Reporting by Nidhi Verma and Rajesh Kumar Singh, Writing by Krittivas Mukherjee

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