One step closer: State Bank of India prepares to open branches in Pakistan

Published: April 25, 2012

Both countries earlier agreed in principle to allow banks to open branches across borders.

NEW DELHI: After 45 years of shutting its service in Karachi and Lahore, the State Bank of India is looking forward to visiting and working in Pakistan again after the two countries agreed in principle to allow banks from both sides to open branches across the borders.

On the Indian side, the Reserve Bank of India is getting ready to invite applications from interested commercial banks, following a meeting of their officials earlier this month. For Indian banks, the biggest problem seems to be the high capitalisation requirement for banks in Pakistan, which Indian lenders find steep.

Newspaper reports quoted bank officials as saying, “There were some differences on the financial parameters for eligibility of banks as the Pakistani side had kept capitalisation norms too high. But the requirement has been scaled down now and the norms have been finalized.”

The two sides have also reached an agreement on the licensing fees that banks will have to pay, reports said.

The modalities will now be circulated to banks, which will then put in applications depending on the feasibility of the proposal. The State Bank of India and Bank of India approached the State Bank of Pakistan in September 2008 seeking permission to start branches again, but high capitalisation requirements forced them to drop their interest in the scheme.

The recent meeting between officials of the two central banks followed the meeting between Indian and Pakistani commerce ministers in New Delhi on April 13, where they announced their intent to fast-track opening of bank branches to boost trade.

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Reader Comments (32)

  • Chulbul Pandey
    Apr 25, 2012 - 8:08PM

    Good luck, guys. Please make sure that you have ample security. Please be safe.

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  • abbas
    Apr 25, 2012 - 8:08PM

    I do not see any such possibilty atleast till 22nd century based on ground realities. Pple on both sides of the border are adversly biased against each other (specifically in India from personal experience). We do not want even cricket players on each other homeland, how can we think of a proper economic ties.

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  • PoorPeace!
    Apr 25, 2012 - 8:27PM

    @abbas: Pple on both sides of the border are adversly biased against each other (specifically in India from personal experience)

    Its true that people in India don’t like pakistanis much bcoz of all the terrorist attack and support of general public for it. But things can change if you people stop treating us as us as adversaries. We in India have no desire to start a war with you, we never did, and certainly no desire to annex any territory.Recommend

  • Ikhan
    Apr 25, 2012 - 9:05PM

    @PoorPeace!:
    India is much much bigger , we never attack on india except Kargil , every time india start war with pakistan and depeated, this is bcoz of ur biased media they wil never till u the truth

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  • Naseer Muhammad
    Apr 25, 2012 - 9:14PM

    Great news!!!!!! The past can not be changed but the future can!!!!!!

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  • abbas
    Apr 25, 2012 - 9:18PM

    @PoorPeace! – Since 47 bought nations have fought and caused damage to each other in differnt manner. India mainly through silent diplomacy as well as causing separation of East Pakistan and now working on Baluchistan through supporting liberation army) and Pakistan being a smaller country with lesser bargaining power using Jihadis (I am not defending them but stating facts as per my knowledge).

    I am not sure how things would change unless thr r open minds on both sides accepting each others existance. From my personal visit to India and interaction with pple I believe they only know of Pakistan which is shown on Indian media. Pakistani channels are effectively non existent as against we get most of Indian channels in Pakistan (though there is hardly any difference in the quality of contents except that ours are relatively low budget).

    The above is only one example of being biased I can quote many others.

    If we have ISI (who Indian believes to be their worst enemy) you have RAW on your side who have caused equal killings on various basis (Baluchistan is a recent proven example). Difference is of strategy but end result is the same.

    Anyway I would hope / wish / pray that for betterment of common pple we learn to live together and accept each others existance. If Europe UK / France / Germany / Ireland / Scotland can survive with each other why not us BUT (a big one) it will take alot of efforts otherwise number of generations before we can forget 1947 and move on further.

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  • PoorPeace!
    Apr 25, 2012 - 9:47PM

    @Ikhan: “every time india start war with pakistan and depeated, this is bcoz of ur biased media they wil never till u the truth”

    I feel sorry for you people when you say such things. Its ur history books with its distorted history that is responsible for comments like above. And then you blame us of not knowing the facts!!! Ever tried any independent source to learn about Indo-pak wars???

    @abbas:
    Creation of Bangladesh was the result of the discriminatory policies of your generals. India ofcourse helped them once genocide happened and refugees started flooding indian border areas.
    Indians already accept the existence of pakistan and are happy with it. Its your nation that is still to accept it. The deluge of articles on Two nation theory etc. is an indication of that. Reality is that Indians want pakistanis to leave them alone.

    Regarding claims of Indian involvment in Balouchistan, you should be asking your army why it has not been able to back its claims with any proof till date. There must be some credible proof to nail us, right? Leave alone India, it has not even showcased any such proof to any other country be it US,UK,S. Arabia etc.

    Bottomline is we want peace but won’t tolerate nonsense. You seem a saner voice and hope there are more people like you.Recommend

  • abdul karim
    Apr 26, 2012 - 12:03AM

    @Chulbul Pandey we have lot bank in pakistan most of them are foreign bank.we do not put r/money under the pillow ..

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  • Sohail
    Apr 26, 2012 - 12:09AM

    Sincerity of efforts only will yield results.

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  • ayesha_khan
    Apr 26, 2012 - 12:51AM

    @abdul karim: “@Chulbul Pandey we have lot bank in pakistan most of them are foreign bank.we do not put r/money under the pillow”.

    The opening of banks in each other’s territory is really on the commercial banking side to facilitate trade for e.g. opening leters of credit, gurantees etc.. It is not expected to have any retail banking footprint an no-one was nder the impressions that Pakistan’s urban dwellers do not have access to retail banking services.

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  • Aafaq
    Apr 26, 2012 - 1:47AM

    @ Poorpeace. . .India can never win any war with Pakistan because Indians lack capabilities. . . .

    Secondly, why Indians don’t use common sense?. . I wonder if this thing exists in India. . . Your media have got zero sense. . .Because even a single needle lost in India, your media will bluntly say its because of Pakistan. . . Please get out of denail status & start living as a peaceful country. . . Don’t mess with us. . .Get some life for GOD’s sake. . .

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  • ZorbaTheRealGreek
    Apr 26, 2012 - 7:27AM

    @Ikhan: depeated indeed!

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  • Yash
    Apr 26, 2012 - 9:36AM

    @Aafaq:

    16th december, 1971 (1630 hours)….find out what happened

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  • bharat
    Apr 26, 2012 - 9:45AM

    It is an admirable effort by an Indian Bank, but its doomed to be a failure.

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  • Apr 26, 2012 - 12:02PM

    But the requirement has been scaled down now

    Why the concession?

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  • Aamir Zafar
    Apr 26, 2012 - 2:45PM

    I reckon that we need to learn from history but have to be forward looking. We have done many mistakes in the past but if you do not acknowledge them you cant correct them.
    We need to be close to India as we share the same culture, almost same food, same language and geographic proximity.
    Rather than pointing fingers at each other lets see what positives can we add. You would appreciate that the literacy levels in both countries is low and people with internet is even lower; and if such people cannot think positively and add value, then who will?
    Firstly, they should open visit visa reciprocally so that people can travel to each other’s countries and understand that humans like us live across the border and not blood thirsty aliens from Mars. Educated people have to bring in this change.
    This hatred has added nothing to us, apart from feeding our armies billions of dollars which could have been used for education, health and social welfare and we could have been a completely different nation.

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  • Ashraf P
    Apr 26, 2012 - 3:17PM

    What if State Bank of India take deposits from Pakistani citizens and then pack up and leave? Who will guarantee our money??

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  • Chulbul Pandey
    Apr 26, 2012 - 4:07PM

    @abdul karim: we have lot bank in pakistan most of them are foreign bank.we do not put r/money under the pillow
    Mr. Abdul, for an outsider, Pakistan is perceived as a country where hatred against India is openly preached and subscribed to. Terrorism and suicide bombings happen so frequently there that providing safety is a big issue. It’s only natural for us to be concerned for the safety of our people.
    The recent jail break in Bannu did not instill any confidence either!
    Sincerely!

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  • Lala Gee
    Apr 26, 2012 - 4:36PM

    @PoorPeace!:

    “Its ur history books with its distorted history that is responsible for comments like above. And then you blame us of not knowing the facts!!! Ever tried any independent source to learn about Indo-pak wars???”

    “Creation of Bangladesh was the result of the discriminatory policies of your generals. India ofcourse helped them once genocide happened and refugees started flooding indian border areas.”

    To know who’s history books have been distorted, just check this link how you conspired, trained, and armed Mukti Bahni terrorists in East Pakistan, and then brazenly attacked a sovereign country without any mandate from UN Security Council. Now India is playing the same game in Baluchistan. I wonder how ignorant a nation could be and people still claim to be the most knowledgeable.

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  • Singh
    Apr 26, 2012 - 6:02PM

    @Ashraf P:
    1INR = 2 Pk Rs.
    Do math Recommend

  • khalsa
    Apr 26, 2012 - 7:42PM

    @Ashraf P:
    SBP…. its not a village or feudal economic setup its a globalized world…come on… behave like you are living in an organized world and not a fortified arab city

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  • Yash
    Apr 26, 2012 - 8:25PM

    @Lala Gee:

    check out the reason for training of mukti bahini…..what will u do if suddenly 10 million refugees from afghanistan come to a single small area in pakistan…like a place lil larger than karachi….

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  • jagjit sidhoo
    Apr 27, 2012 - 6:33AM

    @Aamir Zafar: Well said brother

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  • Adil
    Apr 27, 2012 - 10:02AM

    Let’s move forward? Let’s forget about the wars, the past and our not to be proud of history. It takes two to tango. We’re in it equally. We’re both wrong. I just don’t understand the point of all these pointless arguments. Banks are going to open, trade’s being talked about and we’re still arguing about who’s better. Who was wrong. Who’s right. Let it all go. Change your perceptions. Your thoughts. I’d love to go to Goa one day. And up in the Himalayas. See all my Indian friends. Skype isn’t enough! It’s simple. If you want to move forward. FORGET THE PAST! We’re ONE. The sooner we all realize this, the better.

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  • Concerned
    Apr 27, 2012 - 12:47PM

    India is making concerted efforts to normalise relations with Pakistan. However, there are many in Pakistan who are still stuck up with the past and their mind-set remains anti-India. Until this negative attitude changes across the border, not much progress can be achieved.

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  • tamilian
    Apr 27, 2012 - 4:41PM

    Expecting SBP to open Branches in India… possibly in Chennai…

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  • PTI lad
    Apr 27, 2012 - 9:41PM

    Excellent news. ‘One day’ will come inshallah.

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  • Balma
    Apr 28, 2012 - 12:18AM

    Until my childhood, and may be even today, you could see old marks for State Bank of India right next to the State Bank of Pakistan sign on Pakistan’s Central Bank Building on McLeod road (II Chundrigar Road of today).
    I am wondering if Reserve Bank of India was established post 1947 as India’s central bank, and the old State bank of India then became a regula bank???

    I have heard that for many years after August 1947, Indian currency was stamped ‘Pakistan’ by the State Bank of Pakistan and used in Pakistan. Also, borders were open (i.e. free flow of people back and forth) between the two countries continued till early 50′s. I don’t know what was the reason, borders were closed in 50s. On the other hand, trade I have heard was regulated by the Indian side starting mid 50s.

    One interesting thing I have heard is that a young Malabari came to Pakistan, hung out in Karachi, and then returned to India in those early days….open border days of early 50s.
    He ended up becoming president of India later on. Oh no, don’t expect him to mention that in his biography :-) Why give ammunition to Bal Thakary and Narindra Modi types:-)

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  • j. von hettlingen
    Apr 28, 2012 - 2:35AM

    The Indians are shrewd with money business. India’s penetration into Pakistan would help restructure the local banks and make them more profitable.

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  • jagjit sidhoo
    Apr 28, 2012 - 6:21AM

    @Adil: A breath of fresh air brother

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  • jagjit sidhoo
    Apr 28, 2012 - 6:39AM

    @Ashraf P: I doubt that these banks will have any retail banking, it will most likely be restricted to commercial banking . Regarding SBI’s running away with your deposits , u can be rest assured that will not happen as SBI is a Fortune 500 bank with branches in most countries, they have their reputation to look after. With banks their past track record is everything , just check 45yrs ago when SBI closed its branches in Pakistan did it run away with any ones deposits ? Just relax SBI/ Pakistani banks , are not going to run away with any ones deposit .

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  • abbas
    Apr 28, 2012 - 1:30PM

    @tamilian – SBP is not a commercial bank like SBI. Its mainly regulator and a banker to banks.

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