Moscow:Russia has completed the preparations for extending a $1 billion loan to Iran, pending the provision of bank account details by Tehran.

According to Anadolu Agency, Iranian media reported that the payment process for the loan has been finalized. However, the transfer has been delayed due to disagreements among Iranian government bodies regarding the allocation of the funds.

The loan, initially reported in June, represents the first installment of a proposed $20 billion loan from Russia to Iran. Iran's Planning and Budget Organization is advocating for the funds to be used for vehicle imports, while the Oil Ministry aims to invest in oil industry equipment. Meanwhile, the Agriculture Ministry seeks to allocate the money to import essential goods. As no consensus has been reached, the government has not yet provided the necessary account details to proceed with the transfer.

Iran and Russia are working to enhance their economic and financial relations, which include efforts to increase the use of their national currencies in bilateral trade, reducing reliance on Western financial systems. In June, Iran announced plans to establish a ruble trading board as part of these efforts. An Iranian lawmaker stated at the time that Moscow was expected to provide a $20 billion ruble-denominated loan to Tehran at a 6% annual interest rate.

These developments occur as Iran continues to face extensive U.S. sanctions impacting its oil exports, banking sector, and access to international financial systems. The United States has intensified economic pressure on Iran with secondary sanctions on foreign entities that facilitate Iranian transactions.

In September, the U.S. Treasury sanctioned Russia's VTB Bank due to its correspondent banking relationships with sanctioned Iranian financial institutions. Washington has also targeted financial networks it accuses of assisting Tehran in moving funds and evading sanctions.