Pakistan and China have agreed to relax requirements for setting up bank branches in each other’s countries.
The countries reached this agreement during the third meeting of the second phase negotiations of China-Pakistan Free Trade Agreement held in Islamabad, Pakistan.
Under the new agreement, rules have been relaxed for Pakistani banks with asset requirement reduced from $20bn to $15bn for establishing bank branches.
Pakistani banks will now be allowed to open their businesses in renminbi, after one year of operation in China, down from the previous requirement of three years.
At the same time, the profitability requirement of two consecutive years before the application has been phased out.
A statement from Pakistan’s commerce ministry highlighted that inward remittance which is currently routed through foreign banks, would be routed through Pakistan’s banks once they are opened in China.
Besides, it has been agreed that the Chinese Investments for the Economic Corridor will be channelised through Pakistani banks.