Iran’s Parliament (Majlis) speaker Ali Larijani in a meeting with his Pakistani counterpart Sardar Ayaz Sadiq stressed establishing banking ties between the two countries as a way to facilitate the trade.

In the talks on the sidelines of the Second Meeting of  Speakers in Seoul on 27^th June, he also declared that some measures have been taken to decrease the Customs tax, despite the restrictions.

Absence of a banking channel between the two countries has been a key hurdle in payment mechanism for bilateral trade, following the lifting of sanctions by the international community.

In October 2016, Pakistan and Iran have signed a Memorandum of Understanding (MoU) to open channels in their respective central banks for bilateral trade transactions and put an end to the dollar account for clearance of Letter of Credit (LC).

The agreement has been signed to remove trade hurdles between the two countries.

This is notable that despite the lifting of sanctions following a successful deal, Iran has still not been authorised by the US to use the dollar account for the clearance of LC for international trade. In order to avoid such difficulties, Pakistan and Iran have agreed to end the role of the dollar. The bank accounts will be opened in their respective currencies.

Pakistan and Iran also jointly established a common chamber of commerce both the states have jointly invested around $3 million.