India's home ministry has denied permission to three Iranian banks to open branches in India, which could hurt oil refiners' plans in settling trade with Tehran, the Indian Express newspaper reported Friday, citing unnamed ministry officials.

The ministry declined to give security clearance to Parsian Bank (BPAR1.TE), Bank Pasargad (BPAS1.TE) and Eghtesad-e-Novin Bank fearing threats of money laundering and terror financing, the report said.

A Department of Economic Affairs official said it plans to approach the home ministry again to seek clearance, due to "strategic compulsion" for opening these branches, the report added.

Opening local branches of Iranian banks would have helped skirt U.S. sanctions and boost India's exports to Iran, the report said.

Newspaper website: http://www.indianexpress.com

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