India, Pakistan to open bank branches on reciprocal basis


New Delhi: India and Pakistan have agreed to open bank branches on a reciprocal basis in a bid to facilitate the flow of investment and trade, the commerce ministers of the two countries Thursday.

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“The Reserve Bank of India and the State Bank of Pakistan (the central banks of two countries) have already discussed this matter and will take the next step,” India’s Commerce and Industry Minister Anand Sharma told reporters on the sidelines of a conference here.

Sharma said the central banks of the two countries would soon decide on the place and timeframe of opening branches of commercial banks.

“When we are going to encourage trade and industrialisation, the enabling infrastructure is not only the integrated check posts and custom stations, banks are also essential. That’s why the central banks of two countries are in dialogue,” he added.

Pakistan’s Commerce Minister Muhammad Amin Fahim said the governments of both countries have directed their respective central banks to facilitate the opening of commercial bank branches on a reciprocal basis.

“Both countries are now poised to open bank branches and land routes,” Fahim said at a conference organised by the Federation of Indian Chambers of Commerce and Industry (FICCI) here.

Senior Reserve Bank of India officials are likely to visit Pakistan to discuss the modalities for opening bank branches.

Fahim, who is on a five-day official visit to India, said the two countries have taken a number of measures to facilitate the flow of trade and investments.

“Bilateral trade between India and Pakistan is expected to flourish and hopefully all non-tariff barriers shall soon be removed. These measures will end a positive signal to the business communities about the sincere intention of the two governments,” he said.

During a bilateral meeting Wednesday, trade ministers of India and Pakistan set a target to increase bilateral trade to $6 billion in three years from the current level of $2.7 billion.

“The atmosphere of fear and apprehension has reduced considerably and business persons in both countries have started to believe that governments are committed to normalisation of trade relations,” Fahim said.