|Top public sector banks have shown their interest to open their branches and start operations in Pakistan. State Bank of India (SBI), Bank of India (BoI) and Punjab National Bank (PNB) have filed with the Reserve Bank of India for permission to begin commercial operations in Pakistan.
For BoI and PNB which were founded in pre-partition Pakistan, this would bring some sort of nostalgia for the lenders. PNB started its operations in 1894 in Lahore.
For such a move to happen, banks require permissions from both side of the border. Pakistani authorities have agreed for such a move to happen. RBI and Pakistani regulator, State Bank of Pakistan are discussing interaction of banking sectors of the two country.
PNB's Chairman and MD, MR. KR Kamath expressed his bank's interest to initiate operations in the neighboring state, while BoI was keen to re-acquire its assets in Pakistan which were frozen at the time of partition and has applied with the Ministry of External Affairs (MEA).
SBP has already given two of the country's bank United Bank Ltd. and National Bank of Pakistan permission to start the process to open branches in India.
Mr. Ajay Sahai, Director General and CEO of Federation of Indian Export Organisations emphasised on procedural benefits for Indian companies in Pakistan, stating, "Indian companies would like to deal with Indian banks even in Pakistan due to the comfort level. Also, if a dispute arises, it will be easier for Indian companies to settle them with Indian banks than with Pakistani banks."