The business community of Southern Punjab has hailed the decision of the Central Bank of Pakistan to allow banks to resume ties with Iranian counterparts after the government's recent lifting of sanctions on the neighbouring Persian Gulf country. They said, "Now importers and exporters can open letters of credit (LCs) to do business with neighbouring brotherly country, Iran."
President of Multan Chamber of Commerce & Industry (MCCI) Khawaja Jalaluddin Roomi said, "We welcome the decision of State Bank of Pakistan to open banking channel between Pakistan and Iran." He hoped that "The central bank will soon issue instruction to all the banks in this regard." He further said, "After the issuance of instructions to banks, all permissible transactions with Iran will be made possible."
MCCI Chief said that In February, Pakistan lifted sanctions on Iran pursuant to UN Security Council Resolution 2231. The modalities for lifting of sanctions were finalised at an inter-ministerial meeting chaired by Finance Minister Ishaq Dar. The Ministry of Foreign Affairs issued the formal notification following the meeting, which will revive economic and commercial relationship between Pakistan and Iran, including in the areas of trade, investment, technology, banking, finance and energy.
The lifting of sanctions will enable the two countries to fully reinvigorate various bilateral and multilateral arrangements for promoting investments and co-operation, Roomi said. The resumption of banking ties will enable local importers to open the letters of credit, he added. MCCI President said that Western sanctions on Iran adversely affected its economic relations with Pakistan. The bilateral trade volume fell to $431.76 million in 2010/11 from $1.32 billion in 2008/09 despite the fact both the countries have a preferential trade agreement. He said Iran is the world's second top importer of rice and the biggest importer of Basmati rice. Iran was the major consumer of Pakistan's aromatic rice as it consumed 65 percent of Pakistan's Basmati rice exports. He hoped that more than one lac tons of rice would be exported to Iran in a year.