Ever since the advent of CPEC, it is observed that many Chinese firms are expressing interest to establish their presence in Pakistan. That being said, the State Bank of Pakistan (SBP) has given a green signal to the Bank of China Limited (BoC) to commence its banking operations in the country.
The SBP has issued a banking license to the BoC as it complied with all the regulatory and operational requirements necessary to commence its operations in the country.
It is worth noting that the BoC will be the second Chinese bank to start its operations in Pakistan. Earlier, the Industrial and Commercial Bank of China (ICBC) opened two branches in Islamabad and Karachi on May 20, 2011. The bank offers various services – such as investment banking, corporate finance, foreign deposits, working capital loans, and project loans.
“In Pakistan, the BoC aims to provide specialized banking services to serve the financing needs of China-Pakistan Economic Corridor (CPEC) related projects by leveraging on its experience and global technology platform,” the SBP said in a statement.
The Bank of China is a subsidiary of China Central Huiji, which is the investment arm of the Government of China. Adding to that, the Bank of China is currently the 4th largest global bank in term of tier-1 capital, and 5th largest global bank in terms of total assets. Not just that, the bank is currently listed on the Hong King Stock Exchange and Shanghai Stock Exchange. Globally, the Bank of China has footprints in more than 50 countries out of which 19 are located across China’s “One Belt One Road” initiative.
“The BoC’s entry into Pakistan will not only further strengthen the bilateral relationship of Pakistan and China but will also represent growing confidence of international investors on the country’s banking sector and the stable economic outlook,” said the SBP.
Many analysts believe that this is a wise move as the surge in bilateral trade requires banking services between the two nations. Currently, China is the biggest trade partner of Pakistan while the trade volume has been increasing every year.