Pakistan

SBP chief against imposition of Islamic banking

Jameel says business interests will be taken into consideration

Our Correspondent July 05, 2023

State Bank of Pakistan Governor Jameel Ahmad. PHOTO: TWITTER

KARACHI:

State Bank of Pakistan Governor Jameel Ahmad on Tuesday said that the principles of Shariah would not be forcibly applied to the country’s banking system.

He added that the business interests of banks would also be taken into consideration in this case.

Addressing a function organised on the completion of 75 years of establishment of the SBP, Ahmad said developing banking on Shariah basis was at the top of the central bank’s priorities.

He continued that the move would be implemented with business attractiveness, and not through coercion.

Ahmad pledged that the business interests of banks would also be kept in mind while implementing the principles of Shariah.

In 2022, the Federal Shariat Court announced its verdict in a long-pending case on Riba (interest), declaring the prevailing interest-based banking system as against the Shariah.

It directed the government to facilitate all loans under an interest-free system.

The central bank governor maintained that now SBP’s label framework was in line with modern central banking and it had been improved over time.

The SBP governor pointed out that the banking legislation in the country was based on many laws.

He added that the Banking Companies Ordinance, introduced in 1962, was in conformity with modern laws.

Ahmad said all the powers were vested in the central bank.

“The existing law of the State Bank has given it basic responsibilities like pricing, economic development and stability,” he added.

The SBP governor informed the participants of the gathering that the monetary policy framework was also modern and independent.

He continued that the monetary policy board comprised three economic members as well as external ones.

Ahmad noted that the monetary policy decisions were made independently.

He added that its regulatory framework was modern and conformed to international standards.

The SBP governor maintained that now, banks were run under a risk-based supervision framework according to international norms.

“The supervision of banks is secure and the monitoring has improved with a lot of focus on automation,” he continued.

He elaborated that currently the SBP had 3,000 employees -- a result of automation -- whereas in the 1980s, it was being run with 14,000 workers.

He also highlighted the initiatives of the SBP in recent years, with special mention of micro-payment gateway Raast, Roshan Digital Accounts for overseas Pakistanis, encouragement and facilitation of commercial banks for providing digital banking solutions, and development of inclusive policies for different segments of the society including women, youth, and agriculturists.

Ahmad also spoke about the Strategic Plan of SBP ‘Vision 2028’ and its key areas including bringing inflation to the target level in the medium term, promoting fairness in the banking system, propagating gender-inclusive policies, and encouraging green financing.

Addressing the ceremony, SBP Deputy Governor Sima Kamil discussed the positive consequences of women’s participation in the financial sphere and its effects on the quality of financial decisions in the society.

Recognising the gender gap in financial inclusion, she highlighted the steps taken by the SBP in collaboration with commercial banks to address this shortcoming.

Ahmad also unveiled a commemorative banknote to mark the 75 years of the establishment of the central bank at the SBP Museum.

(With input from APP)

COMMENTS (2)

Adnan Aziz | 1 year ago | Reply Islamic Banking in Pakistan Are these hoarders profiteers bigots extremists tax Dodgers adulterators and smugglers fit for Islamic Banking.

Rebirth | 1 year ago | Reply Modernity is the 2008 2020 2021 financial crises a more than 100 debt-GDP ratio and hundreds of banks going bankrupt in 2008 and the Silicon Valley Bank First Republic in 2023. The problem with hiring Indian-origin people to the highest positions in our country isn t just that they re contemptuous towards Islam and Muslims but it s also that they would take their deep-seated hatred for us rooted in our 1 000 rule over them to an extent that they wouldn t mind harming their own interests. How will this Indian benefit from destroying his own finances and that of his family by pursuing failed economic and financial policies India has a higher debt-GDP ratio than Pakistan and the only reason they avoid going to the IMF is because of 100 billion dollars in remittances that they get from abroad of which Muslims contribute 30 from the GCC countries. India finances 35 of it s budget deficits from treasuries and 25 of its budget goes towards debt servicing. That s their preferred model Accumulate more debt to pay off existing debt The financial sector has never promoted growth in our country. Just collect interest in savings accounts. The recent SVB collapse can be attributed to pursuing interest earnings over actual innovation and business growth. They created a talent deficit for electromagnetic waves weapons and what they refer to as mind control so that s eating away their economies on the inside but in terms of financial and monetary policy it was interest. That s what our banks and SBP has been promoting in Pakistan for decades. Don t invest in the markets or in business just ear interest. That s why we re a third world country and that s where the two naked statue worshipping democracies are heading. Although one is already a third world country. Wonder where this gentleman s naked statue is In his sleeves

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