Karachi, Apr 19: Pakistan's largest bank has received a license to open a branch in China, becoming the first South Asian bank to operate in the second biggest economy in the world.
Habib Bank Limited (HBL) will open its branch in Urumqi, the largest city in the province of Xinjiang, a spokesman for the bank said. Xiajiang province lies along the traditional Silk Route and borders Pakistan.
Without giving a time frame for when the bank planned to start operating its branch the official explained the decision to get a license was taken given the growing economic trade between the two countries.
"A lot of our traders are doing business in Xiajiang province mainly in the city of Urumqi. We want to facilitate them by giving them a proper channel for deals and transactions," he said.
He said Urumqi is a growing commercial and trade centre and the regional hub for China's Belt and Road Initiative (B&RI) in Central Asia.
Pakistan and China are presently surging ahead on their USD 46 billion China Pakistan Economic Corridor project which will connect Gwadar port in Pakistan's Baluchistan province to Xinjiang.
A leading financial analyst said the HBL move was a calculated as in future Urumqi could become a major hub of trade between the two countries.
"Basically the bank wants to capitalise on the growing investment and trade activities between the two countries as it has already developed its reputation with the Chinese business and trade sector.
HBL is a private limited entity first founded in 1947 by the prestigious Habib group and presently holds over 40 per cent of Pakistan's banking market share," he said.
China's interest in Pakistan has grown in recent years in economy and trade as investment from Chinese companies in the first eight months of the current fiscal year to USD 523 million from USD 204 million in the same period last year.
Commodities imports from China to Pakistan have also grown to around USD 5 billion every year.