ISLAMABAD: The Finance Ministry is striving hard for promotion of Islamic banking as a distinct and viable system to address the financial services need of the public in general and business community in particular.
In this regard, the Finance Ministry is also pressing on the concerned stakeholders to take initiate necessary initiatives for improving public perception about Islamic banking” a well placed source told this scribe here the other day. The Islamic banking industry in Pakistan has been growing at a fast pace ever since its re-launch in 2001, starting from almost scratch the Islamic banking industry now represents 10% of overall banking system with 19 banking institutions offering Islamic banking products and services.
The source said that under the directions of the Finance Ministry a three-pronged being followed to facilitate establishment of Islamic Banks, making the Islamic Banking subsidiaries to commercial banks and setting up dedicated Islamic banking branches by the conventional commercial banks. “In this connection the State Bank of Pakistan (SBP) has issued detailed criteria for licenses along with guidelines for Shariah compliance, instructions for Profit & Loss Distribution and Pool Management and also adopted few IFSB prudential and AAOIFI Shariah standards and others,” the source observed.
The source said that although Islamic Banking had shown rapid growth, yet there were still areas which required concerted and proactive efforts by stakeholders to further develop and nurture the industry. “To augment the existing growth momentum and to lead the industry to the higher level of professionalism, SBP prepared “Strategic Plan for- Islamic Banking Industry of Pakistan 2014 – 2018,” the source revealed, adding that plan consisted of vision, mission, values, functional strategies as well as action plans and action plans had been developed keeping in view the strengths, weaknesses, opportunities and threats to the industry.
The source said that Finance Ministry would monitor focus of SBP on key areas/objectives to facilitate and catalyze stable and distinct growth of Islamic banking over the next five years in collaboration with stakeholders. The source added that the functional strategies and action plan for achieving objectives in each area had been developed in consultation with the Islamic Banking Institutions and their Shariah advisers, SBP Shariah Board members, academicians, internal SBP departments, Securities and Exchange Commission of Pakistan (SECP) and Institute of Chartered Accountants of Pakistan (ICAP).
It is expected that with the implementation of this strategic plan, Islamic banking industry will grow prudently and distinctly with enhanced acceptance and confidence of the general masses contributing in the economic development of the country,” the source added.