SCO financing pledges unlock growth for Pakistani banks
The Shanghai Cooperation Organization (SCO) is bringing new opportunities for Pakistan’s banking sector following China’s announcement of expanded development financing commitments. At the 25th Meeting of the Council of Heads of State in Tianjin, President Xi Jinping pledged 2 billion yuan in grant aid this year and 10 billion yuan in loans to SCO Interbank Consortium members over the next three years.
Shaikh Muhammad Shariq, Vice President and Chief Representative of the National Bank of Pakistan in Beijing, highlighted the potential impact of these measures. He explained that the proposed SCO Development Bank could provide Pakistan with critical liquidity and project financing, reducing reliance on Western-led institutions.
P.c. Pakistan Today
According to Shariq, Pakistani banks could benefit from broader access to regional credit lines in infrastructure, trade, and SME financing. Expanded cross-border trade opportunities with China, Central Asia, and Russia, combined with local currency settlements in RMB, Ruble, and Rupee, could ease pressure on Pakistan’s foreign exchange reserves.
He further noted that SCO cooperation may allow Pakistani banks to integrate Chinese expertise in digital payments, blockchain, and AI-driven credit scoring. This could accelerate innovation in green financing, ESG-based products, and Islamic banking, particularly across Central Asia and other Muslim-majority SCO members.
Additionally, Shariq emphasized that Pakistan’s participation in regional payment systems and syndicated loans for SCO-related projects, especially those tied to CPEC, can promote financial inclusion, enhance liquidity, and strengthen investor confidence in Pakistan’s economy.