News: India, Pak banks may open branches across the border

(BL 28/09/2006) Mumbai - Banks in India and Pakistan may open branches across the border in the near future, according to Dr Shamshad Akhtar, Governor, State Bank of Pakistan.

Speaking to reporters at a banking seminar, Dr Akhtar, not naming the banks, said banking regulators in both countries will have to endorse the move, she added. "We share cordial relations with the RBI," she said.

Talking about the banking sector in Pakistan, she said, "We are also trying to consolidate our banking system." They were also looking at floating GDR (global depository receipts) issues, she said. Habib Bank is looking at floating a GDR issue in the next three to four months, while Muslim Commercial Bank, will be coming out with a $100 million GDR issue.

Currently, money is tight in Pakistan. "It is very difficult to say when the situation will ease. We would like to see a decline in the core price index," Dr Akhtar said.

The inflation target for the current year is around 6.5 per cent and economic growth is expected at 7 per cent, she added.