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Our Bureau

Mumbai , Nov. 7

THE central banks of India and Pakistan have agreed to grant permission to two branches of commercial banks to start services in each other's country, on a reciprocal basis.

A press release issued by the Reserve Bank of India said the specific banks to be permitted to open the branches would be mutually agreed upon by the RBI and State Bank of Pakistan in view of their respective regulatory policies and procedures.

The RBI and State Bank of Pakistan will also decide on the subsequent or additional branches as per the policy and licensing norms for foreign banks.

The RBI Governor, Dr Y.V. Reddy, visited Pakistan in May, and the State Bank of Pakistan Governor, Dr Ishrat Husain, visited Mumbai in October.

It has been reported earlier that Pakistani commercial banks Bank Alfalah and National Bank of Pakistan would set up branches in India, while State Bank of India and Bank of India would open branches in Pakistan. The banks are expected to start operations by December.

The banks that had branches in Pakistan before the Partition include Imperial Bank of India (the erstwhile SBI), Canara Bank, Central Bank, Allahabad Bank, Bank of India and United Commercial Bank. Oriental Bank of Commerce and Punjab National Bank had their offices in Lahore and Karachi respectively.

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India, Pakistan agree to open bank branches

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