Iran urges Pakistan to open bilateral banking ties, complete IP gas pipeline

Iran’s envoy to Pakistan Mehdi Honardoost on Thursday regretted that establishment of bilateral banking ties was being delayed because of Islamabad’s ‘conservativeness’, while Iran-Pakistan (IP) gas pipeline project remained frozen.

He was speaking at a seminar at the Strategic Vision Institute (SVI) on “Contemporary Relations between Pakistan, Iran and Saudi Arabia: Present Challenges.”
There were “unjust US sanctions” on Iran, but then “conservativeness of our brothers” was delaying opening of banking channels, even though many countries maintained banking relations with Iran, he said.
The Iranian ambassador’s statement came amid continuing challenges in bilateral ties despite the apparent improvements since Army Chief Gen Qamar Bajwa’s visit to Tehran late last year. Iran leasing out Chabahar port to India and the Pakistan Army announcing deployment of troops in Saudi Arabia are renewing the mistrust between the two neighbours.
Rejects perception that India will use Chabahar port against Pakistan
Banking relations are considered crucial to expanding bilateral trade, which is currently at $1.2 billion. The target is to increase it to $5bn per annum over the next few years, but it looks to be a difficult goal to achieve in the absence of regular banking channels.
The State Bank of Pakistan (SBP) had last April signed a Banking and Payment Arrangement (BPA) with Iran’s central bank, the Bank Markazi Jomhouri Islami Iran (BMJII), for providing a trade settlement mechanism to promote bilateral trade. The central banks of the two countries were to subsequently invite commercial banks to carry out transactions under the BPA. But no progress could be made due to lack of interest on the part of Pakistani banks.
About the IP gas pipeline, Mr Honardoost said there was a consensus that the project was beneficial for Pakistan’s economy, but it was still “frozen” on the Pakistani side due to external and internal factors.
He believed that implementation of the pipeline project would help the two countries surmount some of their common problems, besides paying other economic dividends to them.
The ambassador rejected the impression that India could use Chabahar port against Pakistan. He cited continued sanctions against his country despite the nuclear deal as one of the reasons for leasing out the port.