Banks and DFIs: SBP grants licenses for 713 branches in calendar year 2012

The State Bank of Pakistan (SBP) under its Branch Licensing Policy (BLP) has granted over 700 licenses to banks/DFIs for opening of new branches during the calendar year 2012 (CY12).
Sources told Business Recorder on Thursday that in order to further expand the banking services across the country, banks, DFIs and Microfinance Banks (MFBs) have planned to open hundreds of new branches with billions of rupees investment under their annual expansion plan during current calendar year.
On the banks' request, the SBP under its BLP issued over 700 licenses to banks, DFIs and MFBs to open new branches, sub-branches and booths during CY12, the banking industry's financial year. Under BLP, commercial banks, which want to open new places of business during a calendar year, are required to submit their Annual Branch Expansion Plan (ABEP) to the State Bank for consideration and approval.
With the start of CY12, various conventional, Islamic banks, DFIs and MFBs have submitted their ABEP-2012 with the State Bank and were granted approval for opening branches. "Cumulatively, following branch license policy, for CY12 the State Bank has granted 713 branches license to the local and foreign banks/DFIs to open new branches across the country, providing new opportunity to further expand the banking facilities across the country," they informed.
In addition, out of total licenses issued for current calendar year, as many as 590 has been specified for opening of complete branches including 430 for conventional banks and 160 for Islamic banks and some 123 license has been issued for sub-branches. While applications for opening of permanent booths will be considered by the SBP on individual basis. During the current calendar year, banks will open new branches more than CY11, in which the banks applied to open 570 branches across the country.
Although, this year (CY12) banks plan to open 7 percent or 143 more branches as compared to 2011, however it is still less than 2008, when highest-ever 730 branch or sub-branch licenses were issued by the State Bank in any year. During 2010, the State Bank granted 417 licenses, some 570 licenses in 2011 and now for CY12 some 713 license of branches, sub branches and permanent booths of Islamic and conventional banks has been issued by the central bank. At end of CY11, the total number of bank branches operating in the country stood at 10,442. With the opening/addition of new branches, sub-branches and permanent booths, the total number of bank branches across the country will reach 11,155 at CY12 end.
Sources said under the BLP, banks are required to open at least 20 percent of their branches in rural/under-served areas (RUAs). RUAs mean villages, small towns and also those Tehsil Headquarters where there is no branch of any bank. Some 590 license have been granted for full-fledged branches and accordingly, out of these some 118 branch licenses have been issued for opening branches in RUAs that are as per the mandatory requirement of opening of 20 percent in rural areas. The locations identified by banks for opening new branches are well-diversified throughout the country covering all the four provinces of Pakistan, Northern Areas, Azad Jammu & Kashmir and Islamabad, sources said.