Dr. Singh designated UCO Bank as the "exclusive payment gateway" for Iran. This was a strategic move that not only met India's energy needs but also breathed new life into a loss-making bank. Due to U.S. sanctions on Iran, direct payments to Iran were impossible. Therefore, Indian refineries (such as IOCL, HPCL, etc.) began depositing rupees in UCO Bank for oil purchases from Iran. The key point: Iran agreed to charge no interest on these funds – it was completely "interest-free" money!
Thousands of crores of rupees started accumulating in UCO Bank. Since these funds were interest-free and payments to Iran faced delays (due to trade imbalances), the bank began investing this money. UCO Bank extended loans, made other investments, and earned massive profits. Reports indicate that UCO Bank earned approximately 13,000-14,000 crore rupees in interest – a huge amount at that time. Adjusted for today's inflation and value growth, this could equate to 50-60 thousand crore or even more. Iran never claimed this "interest" and left it as a contribution to India's development.
This decision was the result of Dr. Manmohan Singh's visionary approach. He crafted this strategy in close coordination with Iran's top leadership (including Ayatollah Khamenei). Iran clearly stated that if their money helped India's development projects, it would be their good fortune. The outcome? A bank drowning in losses turned profitable. UCO Bank's share prices rose, net interest income surged, and its balance sheet strengthened significantly. This stands as a living example of India-Iran friendship – where both nations supported each other in times of difficulty.
Oil imports from Iran were vital for India's energy security. Iran was India's second-largest oil supplier, and despite sanctions, India continued importing up to 400,000 barrels per day. The rupee payment mechanism saved India foreign exchange and gave Iran the opportunity to buy Indian goods (such as rice, medicines, tea, etc.). It was a true win-win situation: Iran gifted India 14,000 crore in "interest," while India supported Iran's economy.
Today, as news of Ayatollah Khamenei's martyrdom emerges, this story becomes even more relevant. India-Iran friendship is a debt – a debt of trust built between Dr. Manmohan Singh and Khamenei. Both nations can never fully repay this debt. This friendship is not just about oil and trade; it is rooted in mutual respect, cooperation, and strategic partnership.
Unfortunately, in the current times, questions are arising about this historic friendship. Prime Minister Narendra Modi has not issued any public tribute to Khamenei. Is this silence a sign of change in India's foreign policy? Are we forgetting the friendship that saved us from an energy crisis and prevented a bank from sinking? These are serious questions – have we become "traitors"? What will be gained from this silence?
India-Iran friendship is centuries old. From Chabahar Port to energy cooperation and cultural ties – everything rests on this bond. Dr. Manmohan Singh's strategy proved that courage and foresight can turn challenges into opportunities. Iran's 14,000 crore interest gift is not merely about money; it is a symbol of trust and friendship.
May Dr. Manmohan Singh's blessings always remain. Salute to Ayatollah Khamenei! Long live India-Iran friendship! Jai Hind!
Sajjadali Nayani ✍
Friday World – 1st March 2026
