KARACHI, March 21: The State Bank has asked all banks incorporated in Pakistan to follow a set of guidelines issued on Monday along with some other guidelines contained in its Branch Licensing Policy while seeking its permission for opening branches abroad.

“Recently a number of Pakistani banks have started looking for expanding their branches beyond the national boundaries and have been approaching the SBP on case to case basis,” says the central bank in a letter addressed to heads of all Pakistani banks.

The letter says that in order to streamline the procedure for opening of branches/offices abroad by locally incorporated banks, the requirements given below may be followed while forwarding applications for SBP’s permission:

1. Application on a prescribed format along with a brief business plan.

2). Approval from the board of directors.

3) Approval/NOC from the host country’s central bank.

4). Latest audited annual accounts (if not submitted earlier with any application for opening of branch).

5) Bank/Branch opening policy/ regulations of the host country’s central bank.

6) Supervisory practices in the host country.

7) Operating results of existing branch operations, in case branches of bank already exist in the host country.

The SBP letter says that in addition to the above requirements, parameters as defined in para-4 of the Branch Licensing Policy of the State Bank will be used for evaluating the application for opening of branches in foreign countries.

It advises the banks that as soon as a bank’s board of directors or management decides to enter a certain foreign market for opening branches or offices they should bring such developments into the SBP knowledge “for information purposes.”