ISLAMABAD, Feb 25: Pakistan and Afghanistan have agreed to open the branches of each other commercial banks in Kabul, Kandahar, Jalalabad, Peshawar and Quetta.

Hidayat Amin Arsala, Finance Minister and Vice Chairman of the Afghan Interim government, who arrived on Monday for a two-day visit, met Finance Minister Shaukat Aziz and discussed with him the early possibilities of opening banks on reciprocal basis in the two countries.

Mr Aziz informed his Afghan counterpart that to promote trade through banking channels between the two countries, Pakistani banks were ready to establish branches in Kabul, Kandahar and Jalalabad. While Mr Arsala said that Afghan banks could be established in Peshawar and Quetta. Aziz also offered training of personnel in banking to develop Afghanistan’s financial infrastructure.

The Afghan finance minister was briefed about export friendly regime introduced by Pakistan to promote trade between the two countries. He was informed that in order to promote relations between the two countries, trade has been liberalized by Pakistan.

Now trade with Afghanistan, Aziz said, could be conducted either in Pakistan rupee or in convertible currency with duty drawbacks. To promote transparency in trade, Pakistan has abolished the permit system. Mr Arsla was informed that the government has established a task force under the chairmanship of Deputy Chairman Planning Commission for inter-ministerial coordination so as to assist in rebuilding of Afghanistan.

The government of Pakistan has also agreed to the request of private sector to establish bonded warehouses at Torkham and Chaman to facilitate trade between the two countries. As a result of these measures, the trade between the two countries has picked up and truck traffic at Chaman and Torkham substantially increased.

The private sector of Pakistan, Aziz informed his counterpart, was engaged in several construction projects as well as export of cement and items of daily use.

Regarding Pakistani assistance for Afghanistan, Shaukat Aziz said that an amount of $10 million is being disbursed and would be deposited in a bank to be identified by the Afghan Central Bank. The two sides also discussed various issues related to economic cooperation including currency policy, Afghan transit trade, tariff policies as well as Pakistan’s experience with macroeconomic reform and utilization of foreign aid.