KCCI president Junaid Esmail Makda has said that the government and regulatory bodies such as the State Bank and Securities Exchange Commission of Pakistan need to develop policies that create more conducive environment for Islamic banks to flourish.
Karachi Chamber of Commerce and Industry’s president was speaking at the concluding session of the 8th Annual Islamic Finance Expo & Conference (IFEC), held under the aegis of the Professionals Network and IBA-CEIF, here.
He recommended Public-Private Partnership ventures to bring together researchers, academicians, Islamic Shariah scholars and practitioners for generating innovative ideas to stimulate growth of Islamic finance and overcoming the present-day challenges being faced by the industry.
Furthermore, he said that schemes that encourage participation in the development of and use of Islamic banking would provide a better environment for Islamic banks to fulfil their potential. He appreciated the organisers of Islamic Finance Expo.
Makda said that it was really heartening to see various stakeholders from banks, stock exchanges, securities, leasing, insurance, investment, asset management and fund management companies, financial education institutes and IT firms under one-roof who held intense discussions and gave their valuable suggestions which would certainly prove favourable for the entire Islamic banking sector.
He pointed out that the network of Islamic banking industry consisted of 22 Islamic banking institutions; five full-fledged Islamic banks and 17 conventional banks having standalone Islamic banking branches while net investments of Islamic banking industry increased by 19.9 percent to Rs 617 billion by the end of March 2019 which clearly indicated potential of Islamic banking in Pakistan.
“Assets of Islamic banking industry, while recording a quarterly growth of 4.9 percent, increased by Rs 132 billion to reach Rs 2,790 billion during the January-March 2019 quarter and deposits of Islamic banking industry stood at Rs 2,199 billion,” he noted.
KCCI president further cited that the Islamic banking industry constitutes 15 percent share in assets and 15.6 percent share in deposits of overall banking industry. The number of Islamic banking windows operated by IBBs stood at 1,284.
“Generally, people in the country lack information on Islamic banking due to lack of awareness about the concept and its limited usage in Pakistan and that is why a large number of people consider Islamic financing to be the same as conventional banking,” he said.
He further said that there was a general view that, Bangladesh, Iran, Malaysia, Saudi Arabia Bahrain, UAE and other Gulf Cooperation Council (GCC) countries are prolific in Islamic financing. However, Makda asserted that Pakistan had a huge potential for growth of Islamic finance as it had all ingredients such as legal, regulatory, judiciary, tax and political, to ensure its success and sustainability to become a hub of Islamic finance.
He was fairly optimistic that Islamic finance was growing in Pakistan and the country would emerge as an Islamic finance hub within next decade.
Coordinator IFEC and financial analyst Ateequr-Rehman stressed that Islamic banks should ensure easy access to finance for the business and industrial community as it is essentially needed to promote expansion and industrialisation all over the country that, in turn, would generate massive employment opportunities and reduce poverty.
He also emphasised that Islamic financial industry must realise its national responsibility and look into possibility of making investments in numerous social sectors as well, particularly, the public transportation of Karachi, which really remained in shambles.
Ateeq lamented that commuters take a lot of pain every day and have to experience disrespect on daily basis while coming to their workplaces or returning to their homes. However, he expressed hope that the key players in the Islamic finance sector would look into possibility of investing in this particular sector to ensure that Karachiites get relief.
Source Business Recorder