For the First time HBL Bank operations to be started in China
Chitral Times Report
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
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.
Following concessions were granted to Pakistan on banking sector
Asset requirement for establishing a bank branch has been reduced
to US$15 billion from 20 US$ billion for all Pakistani banks, at
the end of the year prior to the submission of application.
The Pakistani banks can also open their businesses in RMB (Chinese
currency) after one year of their business in China which was
previously three year and business could only be done in dollars.
The condition for being profitable for two consecutive years prior
to the submission of application has also been removed.
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.