Sunday, December 11 2005 14:52 Hrs (IST) - World Time -

New Delhi: State Bank of India, Punjab National Bank and Bank of India appear to be the front-runners in the race for entering Pakistan, even as two Pakistani banks, NBP and Habib Bank may be allowed to open branches in this country.

"National Bank of Pakistan and Habib Bank are likely to be permitted to open branches in India," a top banker from Pakistan told sources during his recent visit to Delhi.

SBI Chairman A K Purwar had also evinced interest in re-entering Pakistan apart from increasing its presence in other SAARC nations. SBI had five branches in undivided Pakistan till 1965. BoI too wants to foray into Pakistan while PNB has applied to RBI for reviving its operation across the border.

"We had two branches in Pakistan till 1965. With our strong presence in border states of Punjab and Rajasthan, we are better placed to provide banking transition in Pakistan," PNB Executive Director C P Swarnkar said.

The effort to re-establish banking ties was going on for the last one year and it yielded results last month when the two central banks, RBI and State Bank of Pakistan agreed to allow two local banks of each country to cross borders after a gap of 40 years.

The banking ties were snapped between the two countries during the 1965 war and bank assets were categorised as 'enemy property' and seized.

Habib Bank, which had a branch in Mumbai, has again applied to RBI for entering India.