Bank of China makes its way into Pakistan with $50 million investment
Bank of China (BoC) will set up its first branch in Pakistan as it has received its banking license from Pakistan’s central bank, the State Bank of Pakistan (SBP).
The government-run Bank of China (BoC) will initially bring in $50 million to meet minimum capital requirements.
The new initiative will ease the financial requirements of Chinese-led “Belt and Road” projects, the central bank said on Saturday.
The statement outlined the Bank of China’s ambitions to become one of Pakistan’s leading financial institutions by opening branches in major cities across the country.
China has pledged to invest some $57 billion in Pakistan’s rail, road and energy infrastructure through its vast modern-day “Silk Road” network of trade routes linking Asia with Europe and Africa.
“The Bank of China aims to provide differential and specialized banking services to effectively serve the financing needs of China Pakistan Economic Corridor (CPEC) related projects by leveraging on its experience and global technology platform,” the central bank said in a statement.
Officials expect a huge uptick in trade between the two countries once Pakistan’s Arabian Sea port of Gwadar is functional and motorways are finished to allow goods to cross the Himalayas to and from China’s western Xinjiang province.
CPEC has been credited with reviving Pakistan’s sluggish economy although some investors have expressed concerns about the potential impact on Pakistan’s currency once debt repayments begin.
The Bank of China is a subsidiary of China Central Huijin, the investment arm of the Government of China. The Bank of China is not only operating in the Chinese main land, but its footprints have reached to 50 countries. Nineteen of those countries are located across Chinese “One Belt One Road” initiative. At the end of 2015, the Bank had a total of 11,633 institutions including 644 in overseas markets.
BoC is the fourth and fifth largest global bank in terms of Tier-1 capital and total assets respectively. It is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange.
The bank is the second Chinese bank entering the Pakistani market after China Development Bank (CDB).