The Iranian government will be allowed to open state-owned Bank Melli in Pakistan, sources said.

According to the Tehran times, the two countries willing to work together after the bilateral meeting between Director State bank of Pakistan, Yaseen Anwar and Mehmood bhemini, Head of a private bank in Iran.

This is a bold move on Pakistan`s part. The US explicitly forbids American banks from conducting business with Melli and has sought to expand sanctions so that foreign companies working with certain Iranian banks are cut off from US financial institutions as well.

Reportedly, the Pakistani government plans to raise an initial tranche of funding for the pipeline by the end of the year, indicating that the project may finally be getting off the ground.

Aside from the obvious benefits for trade, then, this concession on the banking front seems designed to fend off any impressions in Tehran that Pakistan will follow US dictates in defining its relationship with Iran.