China may buy out a Pakistani bank, as the State Bank of Pakistan (SBP) has been directed by the President to remain in touch with Chinese central bank to finalise a feasible proposal, sources told Business Recorder here on Sunday. President Asif Ali Zardari, who visited China a couple of months ago, chaired a meeting in the third week of September as follow-up on his visit.
China has broad interests in Pakistan, and its experts are working on a number of mega projects in different sectors worth billions of dollars. "Chinese officials will remain in touch with the SBP which will finalise a mechanism as well as provide advice to the Chinese side to buy an existing Pakistani bank which would be relatively easier and more convenient than establishing a brand new one," sources said.
Earlier reports suggested that the Industrial and Commercial Bank of China (ICBC), the world's second largest bank, was looking to start operation in Pakistan.
ICBC was exploring the possibility of establishing its presence in Pakistan to provide financial support to Chinese companies investing in Pakistan.
The National Bank of Pakistan (NBP) and the ICBC had agreed to cooperate in the banking and financial sectors in both countries. A declaration calling for exploring the possibilities for mutual co-operation between the two entities had been signed in 2007. The ICBC intends to explore the possibility of establishing its branches and acquiring Pakistani banks to provide financial services.
In 2008, China's investment companies and industrial firms had offered to invest $5 billion in Pakistan's defence, banking, oil exploration and mining sectors and Thar coal and Bhasha dam projects.
Leading industrialists, business executives and serious investors had called on President Asif Ayli Zardari during his visit to China and discussed prospects and opportunities for augmenting Chinese investment in important sectors of the economy with an objective to further diversifying and expanding bilateral economic co-operation.
Those who called on the President along with their respective delegations included Chairman of NORINCO, Chairman of Poly Technologies, Chinese Banking and Regulatory Authority and Chairman of CETC.