Bank comfortable about Iran money transactions

ISTANBUL- Hürriyet Daily News

Commenting on money transaction to Iran, Aslan says “One way or another, we have to make these transactions. We cannot carry the money in trucks to Iran.’ Hürriyet photo

Turkey’s state-run bank Halkbank has signaled the continuation of the lender’s role in payment of the debts from India to Iran, the bank’s general manager told Hürriyet Daily News yesterday. It emphasized that all the bank’s operations were in line with international banking rules.

“As long as there would be no international regulation against [transactions], we will continue to do what is legitimate,” said Süleyman Aslan, general manager of Halkbank, at a press meeting in Istanbul.
India’s state-run Mangalore Refinery and Petrochemicals concluded a successful test payment in euros through Turkey’s Halkbank for Iranian crude oil, in an effort to end a U.S.-created impasse which has seen the refiners build up over $5 billion in debts, according to a report by Reuters in August.

“I can neither say yes we are making the transactions, or no we do not make them regarding the Indian debt,” Aslan said. “I do not find commenting on it appropriate.” He said the lender cares about the sensitivity of the issue related to the sanctions against Turkey’s eastern neighbor. “Both the U.S. and the EU have sanctions against Iran,” he said. “But we are not a bank operating in those countries…the limitations to the international banks and the banks operating in such countries are different.”

Aslan said the bank obeys international banking rules as well as the United Nations’ sanctions against
Iran. Noting that Halkbank already has a branch in Tehran, Aslan said Turkey also makes its transactions in return for the oil and gas purchases from Iran through the lender. “One way or another, we have to make these transactions. We cannot carry the money in trucks to Iran,” Aslan said.

He said the bank would consider its position regarding international transactions only if the international community bans any purchase of oil and gas from Turkey’s eastern neighbor. Responding to a question as to whether the bank had been pressured to halt transactions to Iran by the United States, Aslan said there has been no pressure from the U.S. side.

Halkbank had refused to open an account for an Indian oil company Bharat Petroleum (BPCL) because the company wanted to use the account to make oil payments to Iran. Since last year, India has been looking for a way to make payments to Iran, India’s second largest oil supplier, international media reported Dec.16. Aslan declined to answer questions around the issue.

Required reserve ratio
Aslan said the bank expected Turkey’s Central Bank would decrease the required reserve ration from 10.5 percent to 8.5 percent next year. “I do not expect the Central Bank to give interest on the required reserves of the bank in 2012.” Recently, the Participation Banks Association of Turkey (TKBB) demanded the bank halt its zero interest rate policy for required reserves collected from lenders, which caused a $4 billion loss in the banking sector this year.