SBP may set up bank­ing chan­nel with Iran

The Pak Banker - - FRONT PAGE -

KARACHI: State Bank of Pak­istan (SBP) is likely to de­vise is bank­ing pol­icy for set­ting up for­mal bank­ing chan­nel be­tween Iran and Pak­istan af­ter the fed­eral govern­ment lifted sanc­tions on the neigh­bor­ing coun­try in tan­dem with United Na­tions Se­cu­rity Coun­cil (UNSC) Res­o­lu­tion 2231 (2015.)

The cen­tral bank has com­mu­ni­cated to banks and fi­nan­cial in­sti­tu­tions that pre­vi­ous sanc­tions on Iran have been re­moved by the fed­eral govern­ment which paved the way to­wards com­mence­ment of nor­mal busi­ness ac­tiv­i­ties be­tween the two coun­tries within the scope of the res­o­lu­tion adopted in United Na­tions. Ac­cord­ing to an es­ti­mate, trade be­tween Pak­istan and Iran peaked at $ 1.32 bil­lion in 2008-2009 but sub­se­quently de­clined and is presently around $ 893 mil­lion.

It is ex­pected that the lift­ing of sanc­tions and restora­tion of bank­ing chan­nels be­tween Pak­istan and Iran would re­vive nor­mal trade and busi­ness ac­tiv­i­ties be­tween the two neigh­bors, the cen­tral bank stated. Banks/FIs have been ad­vised to re­main mind­ful about the ac­tiv­i­ties and per­sons which con­tinue to re­main on the UNSC list, as well as the cur­ren­cies or fi­nan­cial sys­tems which are sub­ject to cer­tain re­stric­tions.

Ear­lier, Ashraf Wahra Gov­er­nor SBP said the cen­tral bank could set up bank­ing chan­nels with Iran within two weeks with the go-ahead sig­nal of the Min­istry of Fi­nance, which is re­spon­si­ble to roll out pol­icy with the neigh­bor­ing coun­try on the be­half of fed­eral govern­ment.

Es­tab­lish­ing net­work of Pak­istan's banks in Iran and Ira­nian Banks in Pak­istan will take time from one to two years but things could be done eas­ily and smoothly with­out ma­jor is­sues ac­cept cur­rency.

The bank­ing chan­nel be­tween Pak­istan and Iran could not be run through Dol­lar but ei­ther Euro or Yen, Gov­er­nor said but he cat­e­gor­i­cally men­tioned that sanc­tions in­ter­pre­ta­tions have not been tan­gi­ble so far to take ini­tia­tives by any govern­ment in the re­gion in near fu­ture. Econ­o­mists said the re­lax­ation and lift­ing of sanc­tions on Iran by dif­fer­ent de­vel­oped coun­tries have pos­i­tive out­comes for re­gional trade in­clud­ing Pak­istan and Iran.

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