Three Pakistani banks, including Habib Bank, National Bank of Pakistan and United Bank, have expressed interest in opening branches in India.

The development followed an agreement reached between the RBI and State Bank of Pakistan to permit opening of two branches by banks from India and Pakistan on a reciprocal basis, Minister of State for Finance Pawan Kumar Bansal told the Lok Sabha in a written reply on Friday.

Reserve Bank of India has proposed the names of State Bank of India and Bank of India for opening branches in Pakistan, the minister said.

He further said that banks would be permitted to open branches on terms to be mutually agreed between the RBI and SBP keeping in view the respective regulatory policies and procedures.

The governors of RBI and SBP in the meeting last year had agreed to provide licences to banks of the two countries to open branches on reciprocal and simultaneous basis.