Trade with Central Asian Republics: Banking Sector Policy Option for Pakistan

Abstract

The study endeavors to explore policies and procedures related to banking which are hindering Pakistan’s trade with Central Asia (CA) and to find solution for these problems. The methodology used has conducted secondary analysis of relevant literature, qualitative data collection in the form of qualitative interviews and content analysis of policy documents. The study found that besides trade complementarity there is huge trade potential between the economies of CA and Pakistan. It also found out that with most CA countries this potential is being missed by Pakistan. Reason for this loss is gaps in banking policy of Pakistan. Study recommends a plan be implemented by SBP; that solves the LC opening and implementation problems being faced by traders of Pakistan, for all the CA countries. It also recommends private banks should be incentivized by the SBP to open and operate branches in CA countries.