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Pakistan, China to sign banking agreement

Pakistan and China have finalized the text of agreement on banking sector after two days’ of deliberations at the fourth round of second phase negotiations on Pak-China Free Trade Agreement. PC-FTA is in effect since 2006 and the ministry of commerce expressed its concern over the insufficient utilization of the facilities provided under the PC-FTA in which only few sectors have been able to reap the fruits of the favorable tariffs in an in assessment of the PC-FTA. Both sides have agreed to sign this agreement during the upcoming visit of the Chinese President to Pakistan. President Xi Jinping is expected to arrive in Pakistan on 9 April. As per this agreement, both Pakistan and China will allow banks to open branches in each other’s country. Initially, National Bank of Pakistan (NBP) and Habib Bank Limited (HBL) are expected to open their branches in China. If Pakistani banks start operations the following benefits are expected: (i) presently, the inward remittance/ LC is routed through European banks. Once Pakistani banks are opened the LC routing would be done through Pakistan’s own banks.

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