Banks push Shariah-compliant strategies

Privatisation, tech adoption help banks expand into agriculture, textile, SME sectors

KARACHI:

Competition among banks in Pakistan has intensified, with many prioritizing customer-centric services, including lending and borrowing, following recent privatisations. The adoption of technology, including artificial intelligence (AI) in the near future, is set to enhance service offerings in critical economic sectors such as textiles, agriculture, and small and medium enterprises (SMEs). Shariah-compliant banks are also gaining traction, creating robust competition for conventional banks.

At the Future Summit organised by Nutshell, Citibank MD and Citi Country Officer Ahmed Khan Bozai noted that many foreign banks have gradually exited Pakistan due to the country's declining credit profile. Bozai highlighted that local banks have flourished post-privatisation, while foreign banks now face challenges in competing. Citi, the only American bank still operating in Pakistan, focuses on bringing in foreign investment, collaborating with multinational companies, and assisting Pakistani businesses in expanding globally, especially in markets like Vietnam where Citi can provide support, according to a statement released on Thursday.

HABIBMETRO President and CEO Khurram Shahzad Khan announced the bank's plans to adopt AI in the near future to improve trade monitoring and compliance. He explained that digitalisation in trade finance can help prevent money laundering and pointed out that trade, particularly in South and Southeast Asia, has significantly reduced poverty. In Pakistan, where textiles play a significant role in trade, initiatives like supply chain financing can help smaller companies grow into major players on the global stage.

HBL President and CEO Muhammad Nasir Salim described HBL as a "tech company with a banking license," highlighting the bank's innovative approach to integrating technology across sectors, including agriculture, where HBL leads in agricultural loans. To assist farmers lacking modern tools and techniques, the bank established 'HBL Agriculture', which offers high-quality seeds, fertilisers, expert advice, and financial services through a digital network called 'Dera'.

Al Baraka Bank (Pakistan) CEO Muhammad Atif Hanif detailed the bank's transformation into a digital bank with a commercial banking license.