The Presidents/ CEOs,
All Banks (Incorporated in Pakistan).

Dear Sirs/ Madam,

OPENING OF PAKISTANI BANKS’ BRANCHES ABROAD

Please refer to the Branch Licencing Policy (BLP) issued vide BPD Circular No. 19 dated June 16, 2004, laying down, interalia, procedure, criteria and parameters for evaluation of applications for opening of domestic branches. Recently, a number of Pakistani banks have started looking for expanding their business beyond the national boundaries and have been approaching State Bank of Pakistan on case to case basis. In order to streamline the procedure for opening of branch(es) /office(s) abroad by locally incorporated banks, the requirements given below may be followed while forwarding application for SBP’s permission under section 28 of Banking Companies Ordinance, 1962:

a. Application on a prescribed format under Section 28 of BCO, 1962 along with brief business plan.
b. Approval of the Board of Directors.
c. Approval/NOC from the host country Central Bank.
d. Latest Audited Annual accounts (if not submitted earlier with any application for opening of branch).
e. Bank/Branch Opening Policy/regulations of the host country Central Bank.
f. Supervisory practices in the host country.
g. Operating results of existing branch operations, in case branch (es) of bank already exists in the host country.

In addition to above requirements, parameters as defined in Para -4 of the Branch Licencing Policy will be used for evaluating the application for opening of branch(es)/office(s) in the foreign country. Banks are advised to submit their application to SBP along with above information/documents for obtaining permission to open a branch(es)/office(s) outside Pakistan under section 28 of BCO, 1962.

It may be noted that as soon as a bank’s Board of Directors or management decides to enter a certain foreign market for opening of branch(es)/office(s) they should inform such development to State Bank of Pakistan for information purpose.

Please acknowledge receipt.