The Shanghai Cooperation Organization (SCO) is poised to offer new opportunities for Pakistan’s financial sector following China’s announcement of fresh commitments aimed at supporting regional economic integration and development financing.
Shaikh Muhammad Shariq, Vice President and Chief Representative of the National Bank of Pakistan (NBP) in Beijing, highlighted these opportunities after attending the 25th Meeting of the Council of Heads of State of the SCO in Tianjin. During the meeting, Chinese President Xi Jinping pledged to provide 2 billion yuan (approximately $281 million) in grant aid this year and an additional 10 billion yuan in loans to member banks of the SCO Interbank Consortium over the next three years to promote development financing.
Shariq noted that the establishment of an SCO Development Bank could provide much-needed liquidity and project financing for Pakistan, reducing the country’s dependence on Western-led financial institutions.
He added that Pakistani banks could benefit from improved access to regional credit lines for infrastructure, trade, and small and medium enterprise (SME) development. The expansion of cross-border trade financing with China, Central Asia, and Russia is also expected to grow significantly, particularly with the possibility of local currency settlements in RMB, Ruble, and Rupee. This could alleviate some pressure on Pakistan’s foreign exchange reserves.
Shariq also pointed out that cooperation within the SCO could allow Pakistani banks to leverage Chinese expertise in digital payments, blockchain, and AI-driven credit scoring, offering new avenues for green financing, Environmental, Social, and Governance (ESG) products, and Islamic banking, especially in Central Asia and other Muslim-majority SCO member states.
He further emphasized that Pakistani participation in regional payment systems and syndicated loans for SCO projects, particularly those linked to the China-Pakistan Economic Corridor (CPEC), could strengthen financial inclusion, enhance liquidity, and build investor confidence in Pakistan’s economy.
