India has asked state-run banks to withdraw funds from their foreign currency accounts abroad, especially to 2 governance associate degreed banks as the government of India fears Cairn Energy might attempt to seize the money after an arbitration ruling in a very famous tax dispute.
Cairn was awarded damages of quite $1.2 billion, and interest and prices in December in a very long-drawn-out tussle with the Indian government over its retrospective tax claims.
While the government of India has filed an appeal, the London-listed firm has started characteristic Indian assets overseas together with bank accounts, that would be sealed within the absence of a settlement, that Cairn says.
A Nostro account refers to an account a bank holds overseas at another bank within the currency of that jurisdiction. Such accounts are used for international trade and to settle alternative exchange transactions. “Earlier on the steering was sent to state-run banks to withdraw funds from their Nostro accounts,” one in all the govt. officers, asked to not be named, told Reuters adding that the finance ministry had issued the rules.
The finance ministry didn’t forthwith reply to requests for comment. A banker from one in all India’s twelve state banks conjointly asked to not be known, confirmed the ministry had sent the orders and the government was involving courts abroad might order funds in their jurisdiction be remitted to Cairn.
The Indian Banks’ Association, is a business body representing lenders, didn’t forthwith reply to the letter of invitation for comment where a minimum of 2 state banks conjointly didn’t respond, whereas others couldn’t be reached outside of standard workplace hours.
Cairn same in Feb it had been discussing many proposals with the govt. to search out an answer.
“Cairn continues to possess constructive engagement with the government of India and sent a voice for the corporate same but the second Indian government official same talks between Delhi of India and Cairn were creating very little progress and same the ministry’s request to banks showed the government was disturbed that Brits firm might move quickly to seize assets
Modi’s government has the same views that it’d not create retrospective tax claims in future however it’s defended outstanding cases.