ISLAMABAD: The establishment of a banking channel in China would greatly facilitate the flow of capital for mega projects which the Pakistan government is undertaking with Chinese support, Commerce Minister Khurram Dastgir Khan said on Monday.

Talking to media after meeting with HBL President Sultan Ali Illana and CEO Nouman Dar at the commerce ministry, he said HBL’s branch in the Western Chinese city of Urumqi will be functional this year.

HBL has become the first South Asian bank to start operations in the Western Chinese part. The soft launch of the project will be held on August 14, 2016 in Beijing.

Mr Dastgir highlighted that the Ministry of Commerce has negotiated with China to relax stringent requirements for the entry of foreign banks into the Chinese market.

As a result of successful trade diplomacy, the minimum asset requirement was reduced by $5 billion to $15bn from $20bn for all Pakistani banks, he said.

“This will pave way for other Pakistani banks to follow and utilise the concessions offered by the Chinese side,” the minister hoped.

Mentioning other concessions, he said Pakistani banks can also open their businesses in RMB (Chinese currency) after one year of their business in China. Previously banks were required to operate for 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, the minister said.

Mr Dastgir said 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.

In response to a question, Mr Dastgir said Pakistan has not granted any special concessions to Chinese banking sector as Pakistani banking regulations are liberal.

Presently, the inward remittance /LC are routed through foreign banks.

Once Pakistani banks are opened in China, the financial transaction would be routed through our own banks, explained.

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