New Delhi: India and Pakistan have decided to set up banks in each other''s country on a reciprocal basis.

Disclosing this, the foreign secretary, Shyam Saran, told reporters that the central banks of the two countries would take the follow-up action to give concrete shape to the decision.

The decision was taken during a meeting of the prime minister Manmohan Singh with his visiting Pakistan counterpart, Shaukat Aziz, in New Delhi.