Pakistan's richest man has applied to open Pakistani bank branches in India for the first time since partition 65 years ago, officials said Wednesday. The MCB Bank, Pakistan's largest by market capitalisation at $1.2 billion, is hoping to tap into the potential riches of India's estimated 1.2 billion people.
"We have applied to the State Bank of Pakistan and the Reserve Bank of India, the central banks of the two countries, which regulate the banking sector to open branches in India," a senior MCB official told AFP on Wednesday.
Mian Mohammad Mansha, told the Financial Times that his Nishat group - which has a controlling stake in MCB - had been the first to apply to open branches in India, following recent rule changes.
"Our major rationale is that India is a very profitable market," he was quoted as telling the newspaper in an interview.
MCB has four million customers, with 1,165 branches in Pakistan and eight abroad. A spokesman for State Bank confirmed the application was under examination.
Trade has been hampered by restrictions and tariffs - even now, direct cross-border traffic accounts for less than one percent of their global commerce.
But efforts have been made to improve commerce since Pakistan decided to grant India Most Favoured Nation status by the end of the year.
Analysts said opening Pakistani banks in India and vice versa was "imperative" for efforts to boost trade, which accounted for just $2.7 billion last year.
"Right now the trade between the two neighbours is below three billion dollars, which could increase by three fold in the next three years, if speedy and sincere measures are taken by the two sides," independent economist A.B. Shahid told AFP.