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State Bank of Pakistan allows financial transactions with Iran after more than 03 years

state bank of pakistan


Hania Tahir
2 minutes read

Iran was the first country to recognize Pakistan as an independent state after it got freedom on August 14, 1947. Iran and Pakistan have supported each other at different occasions either in the form of military collaboration or economical aid. Both have a strengthened relationship and are the founding members of the Economic Cooperation Organization (ECO). Recently, State bank of Pakistan cleared all the financial proceedings with Iran. This further strengthened the bond between the two countries by promoting the regular business activities.

Business activities had been slowed down between Iran and Pakistan because of the sanction on Iran. Iranian banks were disconnected from SWIFT(Society for Worldwide Interbank Financial Telecommunication Academic and Science Societies). SWIFT is a Belgium based co-operative organization dedicated to the promotion and development of standardized global interactivity for financial transactions. In March 2012, Iranian banks were disconnected from SWIFT as international penalty against Tehran over it’s disputed nuclear programs.

The Central bank made a statement which stated,

“In line with the federal government’s decision to implement the United Nations Security Council Resolution regarding lifting of sanctions against Iran, the State Bank of Pakistan has communicated to banks/financial institutions that previous sanctions on Iran have been removed and normal business activities can be commenced within the scope of the Resolution.”

The lifting of sanctions and restoration of banking channels between the two countries is expected to revive the normal trade and business activities. The transactions will most probably increase the trade between the two countries again.

Do you know: According to the Trade Development Authority, the trade between Pakistan and Iran fell to $431.76 million in 2010-11 from $1.32 billion in 2008-09. The transactions will most probably increase the trade between the two countries again. (Source: Reuters)

The major Pakistani exports to Iran include Basmati rice, papers and plastics, oranges and the imports include petroleum gas, petroleum products, electric transformers and dry fruits. The tightened penalty between the two countries made the smuggling of drugs and especially petroleum products quite well paid. Now that the sanctions have been lift up , hopefully it will revive the trade conditions and relationship between the two countries.

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