The State Bank of Pakistan (SBP) has allowed Standard Chartered Bank (SCB) Pakistan Limited to establish their local CNY clearing and settlement setup in Pakistan.
“SCB Pakistan can now open CNY accounts of banks operating in Pakistan to facilitate settlement of CNY-based transactions, such as remittances to and from China,” said the central bank.
The UK-based bank can now open CNY accounts of the banks operating in Pakistan to facilitate settlement of CNY based transactions such as remittance to/from China. SCB can also provide CNY liquidity to the interbank market for the settlement of CNY based transactions.
SBP is the only bank with an established network and profitable operations in China and Pakistan both. It is operating with 100 branches in China and nearly 90 in Pakistan. The bank with its strength could play a pivotal role to facilitate business and investment under China and Pakistan Economic Corridor (CPEC) because of its strong presence in both countries which none other bank maintains.
It may be mentioned here that over the years, the State Bank of Pakistan (SBP) has been at the forefront in providing a supportive policy and regulatory environment to encourage the use of local currencies in trade and financing transactions between China and Pakistan.
Earlier, SBP had also permitted Industrial and Commercial Bank of China Limited (ICBC) Pakistan in 2015 and Bank of China Limited (BOC) Pakistan in 2018 to establish similar local CNY clearing and settlement mechanism in Pakistan.
“The expansion of local CNY clearing and settlement setup in Pakistan is expected to further improve efficiency of the local banking system in terms of CNY transactions, enhance market liquidity and facilitate rising trade and investment with China,” said the SBP.