ISLAMABAD: In a major break-through in the export of banking services to China, first Pakistani Bank will open its branch in China this year in the Western Chinese city of Urumqi, capital of Muslim dominated Xinjiang Autonomous Region.
Habib Bank Limited (HBL) will be the first South Asian bank to start operations in the Western Chinese part and the soft launch of the project will be held on 14th August in Beijing this year.
The Minister for Commerce, Engr. Khurram Dastgir Khan while meeting with the President of HBL Mr. Sultan Ali Illana and CEO, HBL Mr. Nouman Dar and later talking to the media said that the establishment of a banking channel in China would greatly facilitate the flow of capital for the mega projects that the Government is undertaking with the Chinese support. He highlighted that the Ministry of Commerce has negotiated with China to relax the stringent requirements to for the entry of foreign banks into the Chinese market.
The Minister mentioned that the as a result of successful trade diplomacy of the MoC, the minimum asset requirement for a Pakistani bank was reduced by $5 billion which resulted in a Pakistani bank qualifying for entry into Chinese market. This is a landmark event which will pave way for other Pakistani banks to follow suit and fully utilize the concessions offered by the Chinese side, the Minister hoped.
Mr. Dastgir stated that the opening of Pakistani Banks in China is the first step in the larger plan of financial and capital connectivity with the Central Asian States where Pakistan is vigorously pursuing road, trade and transit connectivity.
In response to a question, the Minister said that Pakistan has not granted any special concessions to Chinese Banking sector as Pakistani banking regulations are liberal but assured them of fast tracking their applications.
Presently, the inward remittance /LC are routed through foreign banks. Once the Pakistani banks are opened in China, the financial transaction would be routed through our own banks.
It is expected that a substantial amount of money would move through our banks, which would benefit not only to the reserves of the country but help in the expansion of economy.
This new opening in the financial sector of China promises growth and expansion opportunities for Pakistani banks especially in the wake of Pakistan China joint initiatives for development.
The Chinese investment for economic corridor will be channelized through the Pakistani banks. It is expected that the current account deficit is expected to be lower through this initiative.
Replying to a question, Chairman of HBL said that the Bank plans to enhance its presence all along the CPEC in China and Pakistan and further into the financial hubs of China.