ISLAMABAD, Oct 13: National Bank of Pakistan (NBP) hopes to set up its first branch in India next year, the bank's president said on Friday.

“We submitted an application to the Reserve Bank of India a few months back, and have since been in continuous correspondence with them,” Syed Ali Raza told Reuters.

“These things take time. But all going well, we hope to open up a branch there by the middle of next year,” he said.

State-run NBP has a market capitalisation of about $3.15 billion. In the year to December 2005, it had a net profit of Rs12.71 billion ($209.6 million).

Mr Raza said it had not been decided where the bank would open the branch, but said preference would be in the capital, New Delhi.

“It depends if they give us a choice. Most probably, it would either be New Delhi or Bombay,” he said. “But our preference would certainly be New Delhi.”

Last year, India and Pakistan agreed to allow banks to open branches in each other's countries after a gap of four decades.

No Indian banks have yet opened branches in Pakistan.

Two Indian banks operated four branches in Pakistan and one Pakistani bank operated a sole branch in India from independence until the two countries fought their second war over Kashmir in 1965.—Reuters