Dec 29 - Jan 04, 2009

While the world was confronted with severe financial meltdown especially in the United States and the European Union where several banks were sinking and have faced bankruptcy Pakistan seems to be the most favored nation where at least 730 new branches were opened by local and foreign banks during 2008.
The State Bank of Pakistan has issued 730 licenses to commercial banks to open new branches/sub-branches in calendar year 2008 under its Branch Licensing Policy (BLP). This is the highest ever number of licenses given by the State Bank in any year.
In 2007, the State Bank issued a total of 474 branch licenses. As of Dec. 16, 2008 the total number of bank branches operating in the country was 8,886. It may be mentioned that under BLP, commercial banks which want to open new places of business during a calendar year are required to submit their Annual Branch Expansion Plan (ABEP) to the State Bank for consideration and approval. Accordingly, various banks submitted their ABEP-2008 and were granted approval for opening of branches.
As required under the BLP, banks are required to open at least 20% of their branches in rural/under-served areas (RUAs). RUAs mean villages, small towns and also include those Tehsil Headquarters where there is no branch of any bank.
Accordingly, in 2008 a total of 144 branch licenses have been issued for opening branches in RUAs that exceeds the mandatory requirement of opening of 20%. The locations identified by banks for opening of new branches are well diversified throughout the country covering all the four provinces of Pakistan, Northern Areas, Azad Jammu & Kashmir and Islamabad.
In addition, a total of 178 licenses for opening of sub-branches have been granted in 2008 while 408 licenses were granted to open up branches in urban areas. A total of 30 banks were granted permission by the State Bank to open new branches/sub-branches in 2008.
Highest numbers of 66 licenses were granted to BankIslami, followed by Meezan Bank 61 and 55 each to Askari Bank and United Bank Ltd. Other prominent banks which were given branch/sub-branch licenses in 2008 include Bank Al Falah 51, Bank Al Habib 50, KASB Bank 38, Emirates Global Islamic Bank 30, MCB Bank 30, JS Bank 30, Soneri Bank 28, Faysal Bank 25, Arif Habib Bank 21, My Bank 20, National Bank 19, Habib Bank 18, Kashf Microfinance Bank 18, Dawood Islamic Bank 16, Atlas Bank 15, Allied Bank 14, AlBaraka Islamic Bank 12, Habib Metropolitan Bank 10, The First Microfinance Bank 10 and miscellaneous 38.
It may be pointed out that branch network of Islamic banking institutions also crossed an important milestone of 500 branches in December 2008. The total branch network of Islamic banking institutions now consists of 506 branches including 70 sub-branches. In December 2007, total branches of Islamic banking institutions were 289 and during this year 217 new outlets have been opened by Islamic banking institutions. This impressive growth is a proof of resilience of Islamic banking industry in Pakistan, which would be helpful in achieving the cherished target of 12% market share by Islamic banking till 2012 as envisaged in Strategic Plan announced by the State Bank.


Meanwhile, realizing the need for sustained efforts to achieve a common platform for integration of South Asian economies to facilitate timely trade payments and remittances, there are strong possibilities of opening new branches of commercial banks across the border in the SAARC countries.
Speaking at the opening session of the 4th quarterly meeting of the South Asian Association for Regional Cooperation Payments Council (SPC) meeting held at the State Bank of Pakistan, Karachi Dr. Shamshad Akhtar, Governor State Bank has appreciated the progress made by the SPC since its establishment in mid last year.
The idea of having a regional payment initiative in the SAARC region was originated at the SAARCFINANCE Conference on ‘Towards a Regional Payment Group’ held at the Central Bank of Sri Lanka (CBSL) in July 2007.
The Governors of the SAARCFINANCE Group approved the proposal for establishing a SAARC Payments Initiative (SPI) at its 16th meeting held in Washington in October 2007.
The SPI is a regional forum created by central banks/monetary authorities of SAARCFINANCE Group to have common understanding and cooperation to help each other to move forward in reforming their national payment and settlement systems (PSS) and also to establish an appropriate regional payment system that facilitates trade and investment flows in the region.
The vision of SPI is to create an efficient, robust, stable and convergent payments system for the SAARC region that benchmarks with international standards. SPI is led by the SPC, an apex body responsible for policy making with regard to the activities of SPI.
The 4th quarterly meeting of SPC was chaired by Dr Ranee Jayamaha, Deputy Governor of Central Bank of Sri Lanka, who is also the chairperson of the council. Other representatives who attended the meeting were Mr. Yaseen Anwar, Deputy Governor, State Bank of Pakistan, Mr. Bir Bikram Rayamajhi, Deputy Governor, Nepal Rastra Bank, Ms. Aishath Zahira, Deputy Governor, Maldives Monetary Authority, Ms. Janakie Mampitiya, Secretary/Director Payments & Settlement Dept. Central Bank of Sri Lanka and Ms. Rinzin Lhamu, Head Banking Division, Royal Monetary Authority of Bhutan.