Habib Bank Limited granted Chinese licence

KARACHI: The Habib Bank Limited said on Monday it had won a licence to operate a branch in the Chinese city of Urumqi, the first South Asian bank to be granted such a licence.

The opening of the Pakistani bank in Urumqi, the capital of the violence-prone far-western region of Xinjiang, which borders Pakistan, will deepen ties between the two countries that last year signed a $46 billion agreement for infrastructure and energy projects.

“HBL will be establishing banking operations in Urumqi, the largest city of the province of Xinjiang, which borders Pakistan along the traditional Silk Route,” the bank said in a statement.

Up until April Pakistan’s government held a 42.5 percent stake in Habib, the country’s oldest bank.

But it sold off its shares as part of Prime Minister Nawaz Sharif’s plan to privatise 68 public institutions, bringing in more than $1 billion.

Pakistan last year signed an agreement for projects worth $46 billion with China to set up a China-Pakistan Economic Corridor (CPEC), in a boost to Pakistan’s crumbling infrastructure and energy sector.

In return, China will get a free trade zone in Pakistan’s Gwadar port and access to the Arabian Sea.

New Pakistani roads will open up routes for Chinese goods into Europe and the Middle East from landlocked Xinjiang, which borders Pakistan.