The State Bank of Pakistan (SBP) has granted licence to a Chinese Bank "Industrial and Commercial Bank of China (ICBC)," to commence its operations in Pakistan. ICBC is China''s largest bank with a market capitalisation of $300 billion. The bank is pursuing an ambitious expansion drive in the Middle East and in big cities across Europe.
"ICBC had applied for a banking licence a few months ago. The bank aims to exploit opportunities in trade and project finance generated by a growing number of Chinese companies working in Pakistan," sources in banking industry said, adding that it will also be a good message for the banking industry as well as the global industry, which recently faced a financial meltdown. Wen Jiabao, the Chinese premier, is on a three days visit to Pakistan to further strengthen long-standing ties.
State Bank Governor Shahid Kardar handed over the license to Yang Kisheing, president ICBC at a simple ceremony held at Islamabad on Friday. Chief spokesman Syed Wasimuddin has also confirmed that the license has been given to ICBC after completion of all legal and regulatory requirements.
As per banking rules, a bank having less than 5 branches required a MCR of Rs 3 billion and a bank with more than five and less than 50 branches need to fulfil Rs 6 billion MCR, Wasim said. Some Rs 10 billion capital requirement is necessary for a bank, which wants to open more than 50 branches. The ICBC applied for a bank mode banking with five branches. Sources said the State bank has granted a branch mode-banking license to the ICBC and initially ICBC will start operation with two branches.
First branch will be opened in Islamabad and second in Karachi, while in the second phase ICBC will open branches in other parts of the country including Lahore. They said that it''s a clear message for the world banking industry that despite meltdown, Pakistan''s banking industry is strengthening and has ability to absorb shocks.
SBP Governor Kardar, in a interview said he believed that ICBC will act as a catalyst for greater activity by Chinese companies who are already investing in infrastructure, energy, telecommunications and mining. "I would see a greater increase in economic activity in terms of China and Pakistan," Kardar said and added that the signal that goes out is that Pakistan is open for business.
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