Iran and Pakistan’s biggest lenders are interested in opening branches in each other’s country, which was announced in a meeting between the governor of the Central Bank of Iran and the Pakistani ambassador to Iran.

“Pakistani lenders, especially HBL Pakistan, are interested in opening branches in Iran. Therefore, in addition to welcoming this, the CBI is ready to grant the necessary permits,” the official news website of CBI quoted the central bank governor, Valiollah Seif, as saying.

The official proposed that at least one bank from Iran and Pakistan would start operations in each other’s country. He referred to Bank Melli Iran, the nation’s biggest lender, as the bellwether from the Iranian side, adding that it has already obtained the permit from the central bank.

Asif Durrani, the Pakistani ambassador, welcomed the proposition and said, “We are waiting for this to happen as soon as possible.”

He added that the multinational HBL, the largest bank in Pakistan –formerly referred to as Habib Bank Limited– and the Karachi-based United Bank Limited have had representative offices in Iran for years.

“These two lenders have branches in many parts of the world and we hope that they can open branches in Iran as well,” the diplomat added.

The CBI chief noted that Iran is looking forward to expansion of ties between the two countries based on the Banking and Payment Arrangement signed by the State Bank of Pakistan and its Iranian counterpart in Tehran in mid-April.

The objective of BPA was to provide a settlement mechanism to promote trade between Pakistan and Iran, and it will be used for trade payments conducted via letters of credit and in accordance with international laws and regulations.

In his meeting with the ambassador, Seif also spoke of Iran’s efforts to integrate its bank card system with several countries, expressing his desire to implement such a scheme with Pakistan as well.

As he noted, Iran recently integrated its bank card system with Russia and is “on the cusp” of doing so with Qatar and Oman. Furthermore, “negotiations have also been made with Turkey”.

As announced earlier, Iran is also in various stages of integrating its bank card system with Japan, Azerbaijan, Iraq and China. The measure allows the citizens of both nations to use their bank cards in their respective countries.

Seif also proposed that a joint account be formed for settling transactions between the two countries, based on which local currencies will be used for facilitating trade deals.

Both Durrani and Seif concurred that considering the history of dealings between Iran and Pakistan, the current volume of trade is lower than what is expected.

Seif stressed that mutual trade can be improved by facilitating banking relations and restoring ties, while the ambassador said “we are looking to improve trade ties to hit $5 billion”. In 2016, trade volume between Iran and Pakistan stood at $359 million.

Source » financialtribune