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The time, it seems, is still not ripe for opening bank branches between India and Pakistan even as the private sector from both sides makes every effort to boost trade and investment.
“For banking branches to be opened in each other’s country, the transactions have to be formalised. This is going to take time,” said Syed Yawar Ali, co-chairman, Pakistan-India Joint Business Forum, concluding the two-day meet that started Thursday.
Talk of opening banking branches across the border have been on for a long while. Under the previous government in India, the plan reached an advanced stage.
The State Bank of Pakistan, that country's central bank, had even written a letter of intent to the Reserve Bank of India (RBI), enumerating which Pakistani banks wished to enter India.
Indian public sector banks State Bank of India and Bank of India had branches in Karachi and Lahore till 1965. These shut down following the war between both countries that year.
Ali said all processes concerning the grant of ‘Most Favoured Nation’ (MFN) status to India had been done by the Pakistani government. He indicated a final decision on this would be taken only after the meeting of both foreign secretaries on August 25.
PIJBF is a government-notified body, having members of the private sector, as part of 'Track-II' diplomacy. It was created in 2012 to establish robust business ties between the neighbours and to smoothen some of the irritants to a normal trading relationship.
During the meeting this time, both sides took stock of the progress done by the task forces on agriculture and energy. “The energy sector has been identified as one of the high potential areas. Under this, we are planning to export power to Pakistan and obtain raw material such as coal in return,” said Sunil Kant Munjal, chairman, PIJBF, during a conference by the Confederation of Indian Industry.
IPJBF has identified 10 areas of cooperation. These are agriculture, automotive and engineering, chemical and petrochemicals, infrastructure, pharmaceuticals, information technology, textiles, education and vocational training, health care, dispute resolution and trade facilitation.
According to Ali, commerce secretaries from both sides are expected to meet soon.
While addressing the plenary session ealier in the day, Pakistan High Commissioner Abdul Basit said that it wants a level-playing field for promoting and further strengthening trade ties with India.
"There is need to address concerns relating to market access, tariff and non-tariff barriers. At the same time, innovative proposals and ideas may also be explored which can help create economic inter-dependence between the two countries," Basit, High Commissioner for Pakistan, said.
So far the joint business council has met only four times. The forum first met in June 2013 in Islamabad, then in October 2013 in New Delhi, followed by the third one in Lahore in February this year and the fourth one this time.
