Indian banks' Pak foray stuck for want of guidelines | india | Hindustan Times
Today in New Delhi, India
Jan 16, 2017-Monday
New Delhi
  • Humidity
  • Wind

Indian banks' Pak foray stuck for want of guidelines

india Updated: Aug 15, 2012 21:19 IST
Mahua Venkatesh
Mahua Venkatesh
Hindustan Times
Highlight Story

The government and the Reserve Bank of India (RBI) are yet to formulate guidelines on Indian banks' entry into Pakistan. Central banks of both countries have gone slow on working out regulatory issues including know your customer (KYC) norms.

State Bank of India (SBI) and Punjab National Bank (PNB) have evinced interest in foraying into the neighbouring country.

Indo-Pakistan trade has got a boost in recent times. However, "it would require more collaboration between the two. The finance ministry would soon look into the issue," a senior government official said.

In 2007, the PNB board gave in-principle approval for opening branches in Pakistan. The Delhi based bank even applied to the the Reserve Bank of India (RBI) seeking its permission. However, following political turbulence between the two neighbours, PNB shelved its plans.

Commerce ministers of the two countries had earlier met in New Delhi and discussed the issue.

The two countries, while signing the trade agreement in February, decided to give priority to opening of bank branches in each other's territory.

Bilateral trade between India and Pakistan, estimated at over $2 billion (Rs. 11,140 crore) currently, could go up to $6 billion (Rs. 33,420 crore) by 2014. Following the trade agreement between the two in February, Pakistan has promised to accord the Most Favoured Nation status to India to facilitate trade.