Bank of China starts its operations in Pakistan

According to a statement by State bank of Pakistan on 18th September the Bank of China (BoC) has been allowed to commence banking business in Pakistan. This is the second Chinese bank which has been allowed to operate in Pakistan.

Earlier, the Industrial and Commercial Bank of China (ICBC) opened two branches in Karachi and Islamabad on May 20, 2011. The ICBC provides various services including corporate finance, investment banking, foreign deposits, project loans, and working capital loans.

According to SBP “In Pakistan, the BoC aims to provide specialised banking services to serve the financing needs of China-Pakistan Economic Corridor (CPEC) related projects by leveraging on its experience and global technology platform,”.

The BoC is a subsidiary of China Central Huijin, the investment arm of the Government of China. The BoC is the 4th and 5th largest global bank in terms of tier-1 capital and total assets, respectively. It is listed on the Shanghai Stock Exchange and the Hong Kong Stock Exchange. Globally, the footprint of BoC is spread across 50 countries out of which 19 are located across China’s One Belt One Road initiative.

Indulgence in Unlawful activities

In year 2015 Bank of China involved in a row of serious frauds overseas. Italian prosecutors want to indict the Bank of China's Milan branch and almost 300 people over a money-laundering scheme. Prosecutors in Florence allege €4.5bn ($5.1bn, £3.2bn) was transferred from Italy to China. It was earned through prostitution, counterfeiting, tax evasion and labour exploitation, they say. The Ansa agency said (in Italian) that four senior managers with the Bank of China could be indicted. Close to half the €4.5bn, transferred between 2007 and 2010, went through the bank's branch in Milan, investigators say. The Bank of China received €758,000 in commission for the transfers, it is claimed. There were millions of transactions, Ansa said, that were below the €2,000 threshold that would have triggered money-laundering checks. That threshold has since dropped to €1,000.

In 2012, the families of eight terror victims of the 2008 Mercaz HaRav massacre in Jerusalem filed a $1 billion lawsuit against the Bank of China. The suit asserted that in 2003 the bank's New York branch wired millions of dollars to Hamas from its leadership in Syria and Iran. The Bank of China subsequently denied providing banking services to terrorist groups: "The Bank of China has always strictly followed the UN's anti-money laundering and anti-terrorist financing requirements and regulations in China and other judicial areas where we operate."