SBP inks accord with Iranian counterpart
KARACHI: The State Bank of Pakistan (SBP) has signed an agreement with Bank Markazi Jomhouri Islami Iran (BMJII) to facilitate bilateral trade.[TOP]
The agreement was signed in Tehran, a press release by the SBP said on Friday. `An agreement on Banking and Payment Arrangement (BPA) has been signed between the SBP and BMJII,` it said.
SBP Deputy Governor Riaz Riazuddin and BMJII Vice Governor Ghulamali Kamyab signed the agreement on behalf of their respective central banks.
The objective of the agreement is to provide a settlement mechanism to promote trade between Pakistan and Iran. `This mechanism will be used for the payment of trade conducted via letters of credit and in accordance with international laws and regulations,` the statement said.
Both institutions will now invite banks in their respective jurisdictions to act as authorised banks for undertaking trade transactions under the BPA. `Details of the mechanism will be issued by the SBP in due course,` it noted.