Following India’s move to allow investments from the neighbouring country, Pakistan’s central bank has allowed two banks to open branches in India as part of efforts to normalise economic and trade relations between the two countries.
State Bank of Pakistan Governor Yasin Anwar told the media that National Bank of Pakistan and United Bank Ltd had been given the “green signal” to operate in India.
Anwar’s remarks came in the wake of India’s decision to allow investments by Pakistanis in all sectors except Defence, space and atomic energy.
He said the Reserve Bank of India had been informed of SBP’s decision of allowing the Pakistani banks to explore opportunities in India.
In a major decision, India on Wednesday allowed investment from Pakistan paving the way for Islamabad to normalise bilateral economic ties by implementing much-delayed Most Favoured Nation status for New Delhi.
India’s move to allow Pakistani investments has been welcomed by businessmen on both sides of the border.
Earlier this year, Pakistan switched over to a negative list regime for trade with India, paving the way for giving the Most Favoured Nation-status to the neighbouring country.
However, recent reports have indicated that Pakistan has decided to link progress in normalising trade relations to the resolution of other issues, like the Kashmir issue and the Sir Creek border dispute.
Trade between India and Pakistan is worth a little more than $2 billion dollars and the two sides have agreed to increase it to $6 billion dollars by 2014.