SBP praised for Islamic banking initiatives

The State Bank of Pakistan (SBP) has consistently promoted and encouraged Islamic finance within Pakistan, and it has taken several significant steps, said the central bank.

In a statement on Thursday, it cherished that the Islamic Finance News (IFN), an arm of RED money Group, Malaysia, had announced the State Bank of Pakistan as best central bank of 2021 across the world with regard to promotion of Islamic finance.

The measures taken by SBP for promotion of Islamic finance include launch of third five year Strategic Plan for Islamic banking 2021-25, Shariah compliant standing ceiling facility and open market operations and strengthening of Shariah governance mechanism.

Moreover, Shariah compliant regulations for the lender of the last resort (LOLR) facility and licensing regime for digital banking covering the Islamic segment were also undertaken besides working to enhance awareness of Islamic finance among the masses.

“The Strategic plan 2021-25 envisages to lift Islamic banking’s share to 30% in terms of assets and 35% in terms of deposits in the overall banking system,” it said.

Despite the challenges posed by Covid-19 for the global financial market, Islamic banking industry in Pakistan continued to maintain its impressive growth trajectory.

It cherished that assets and deposits of Islamic banking industry grew on year-on-year basis by 28.2% and 26% respectively by September 30, 2021.

The market share of Islamic banking assets and deposits stood at 17% and 18.6% respectively in the overall banking system in the country as of September 30, 2021.

Published in The Express Tribune, January 14^th, 2022.

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