The standard covers the appointment and optimal composition of sharia boards, fit and proper criteria of scholars, as well as steps to ensure the independence of their rulings. PHOTO: REUTERS
LAHORE: Provincial minister for finance Dr Ayesha Ghous Pasha said on Wednesday that Islamic banking services in Pakistan will continue to grow, estimating that the Shariah-compliant segment will reach $17.6 billion in assets by 2018.
Islamic finance body drafts new standard for centralised sharia boards
Speaking at the 5th Global Forum on Islamic Finance organised by COMSATS Institute of Information Technology in Lahore, Pasha said that Islamic banking has gained enormous attention both globally and locally.
“Due to its resilience in financial crisis, Shariah compliant finance models have gained popularity in many economies,” she said. “Alongside this, Islamic finance also features investment in real assets and risk-sharing, hence it has grown tremendously in the past few decades.”
The provincial minister for finance added that Pakistan has a mature financial industry that has been focusing on broadening the Shariah compliant sector in a country with more than 190 million people.
“Islamic finance is expected to take off in Pakistan in the coming years due to new regulations on Shariah compliant banking, new industry supporting regulatory bodies, as well as the rising demand from foreign investors,” she said, adding that the country’s Islamic banking industry has been growing at over 30% per annum over the past five years, which is above the average global rate.
“If this trend continues, it can be expected that by 2018, Islamic banking assets in the country would be worth $17.6 billion.”
According to Pasha, the growth strategy is being supported by the State Bank of Pakistan, which seeks to double the number of Islamic banking branches.
“The government is serious in supporting the growth of Islamic banking in the country. It has taken steps required for effective implementation of Islamic finance that includes formation of task force to undertake amendments in legal and regulatory framework,” she said.
Assets of Islamic banks double from Rs837b to Rs1.6t
“The issuance of Sukuks by the government during the last three years, including the recent issuance of $1 billion international Sukuk, is proof of the commitment to Islamic finance. Currently, we are also exploring options of Islamic borrowing instruments at the provincial level,” she added.
Recently, the International Monetary Fund endorsed the principles of Islamic finance by saying that it can help promote macroeconomic and financial stability.
Published in The Express Tribune, March 23rd, 2017.
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