SINDH - IRAN SEEKS TO ESTABLISH EXPORT BANK IN

C O N F I D E N T I A L KARACHI 000027 C O R R E C T E D C O P Y (DECLASSIFICATION DATE) SIPDIS E.O. 12958: DECL: 1/27/2019 TAGS: EFIN ECON PGOV PREL PK SUBJECT: SINDH - IRAN SEEKS TO ESTABLISH EXPORT BANK IN KARACHI Classified By: CLASSIFIED BY CONSUL GENERAL STEPHEN FAKAN FOR REASONS 1 .4 (b) AND (d) ¶1. (C) Summary: The Iranian Consul General in Karachi told the Karachi Chamber of Commerce and Industry (KCCI) that his country plans to establish an export promotion bank in the city, a move that appears to have KCCI support. According to a media report, the State Bank of Pakistan (SBP) would coordinate this action and the establishment of a National Bank of Pakistan (NBP) branch in Iran. However, SBP and NBP officials were unaware of the Iranian proposal or the claims in the media reports. The project seems to be in the planning stage with no timeline set for completion. End summary. Iran Wants Export Bank in Karachi -------------- ¶2. (C) On January 20, Karachi Chamber of Commerce and Industry (KCCI) President Anjum Nisar told EconOff that Iranian Consul General Masoud Mahammad Zamani told KCCI members that his country planned to establish a branch of its export promotion bank in Karachi. Nisar said he had begun discussing the idea with the Iranians over two weeks ago and the concept was unveiled at a January 15 KCCI meeting. He said planning was preliminary at this point. ¶3. (C) Nisar explained that many Pakistani businesses have had difficulty trading with Iran due to the lack of a dependable letter of credit facility. He emphasized that the issue revolved around bilateral trade issues and had no political implications. KCCI ) the largest trade chamber in the city - typically represents small businesses and consumer goods manufacturers. Pakistan Bank Officials Unaware of Plans -------------- ¶4. (C) A January 16 media article on the Iranian Consul General's meeting with KCCI members also noted that the State Bank of Pakistan (SBP) would coordinate operations with the Iranian export promotion bank and that the National Bank of Pakistan (NBP) planned to establish a branch office in Iran in the near future. However, Syed Irfan Ali, SBP Director of Banking Policy and Regulation, told EconOff on January 20 that he was unaware of any Iranian plans to establish a banking presence in Karachi or of any plans by the NBP to set up a branch in Iran. NBP President Ali Raza confirmed that his bank had no such plans at this point. Comment -------------- ¶5. (C) In KCCI, Iran appears to have found an eager advocate to support establishment of an export promotion bank in Karachi. The dismal worldwide economic climate coupled with the country's recent financial woes has hobbled many of Pakistan's consumer driven companies. KCCI appears to be seeking to expand its members' business and trade base. However, given that the major banking and GOP regulators are unaware of the Iranian plans, the project appears to be in its infancy with many hurdles yet to overcome. FAKAN