New letter of credit (L/C) facilities at banks in India and Myanmar may emerge after a senior Indian official revealed that the governments of both countries are considering opening up cross-border banking arrangements.

The Moreh branch of the United Bank of India (UBI) and Myanmar Economic Bank (MEB) are reported to be working towards establishing the new L/C facilities.

Trade boost

According to chief minister of the north Indian state of Manipur, Ibobi Singh, the governments of India and Myanmar are not only considering opening up the banking system in order to boost cross-border trade between the two countries.

"Several measures are being taken up by both the central and the state governments to promote trade links with South East Asia and to expand the existing border trade with Myanmar by increasing the flow of traded items," the chief minister said.

New facilities

As well as improving L/C facilities and other areas of trade finance, the Manipur government is acquiring 45 acres of land on its border with Myanmar to facilitate cross-border trade.

No details have emerged yet about the nature of the L/C facilities that UBI and MEB may come up with.

Look East

The announcement of ideas and initiatives to boost cross-border trade in this region follows a February visit by a Myanmar delegation of officials and 28 other trade related bodies to Manipur where they met traders and officials from the northeast Indian state.

India's central government is making efforts to frame a policy for development of trade with South East Asia under the country's Look East policy.

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