Bank of Khyber terms Karachi important market

Promotes Islamic banking operations through road show in city.

KARACHI: Karachi is home to arguably the world’s largest concentration of the Pashto-speaking population, which makes it a prime market for the Bank of Khyber (BoK).

Addressing the business community here on Tuesday, BoK Managing Director Shamsul Qayyum said Karachi is an important market for his bank. “We have the highest number of branches in Karachi after Peshawar,” said Qayyum while urging Karachi-based businessmen to do business with BoK.

The majority stake in BoK rests with the government of Khyber-Pakhtunkhwa (K-P). It is a medium-size bank with over Rs110.9 billion in assets at the end of the third quarter of 2014, the latest period for which official data is available.

Its net profit for the nine-month period ending on September 30, 2014, was Rs826.1 million, up 2.4% from the same period of the preceding year. Forty-four out of its 101 branches throughout the country are dedicated Islamic banking branches, according to the latest financial accounts of the bank.



Although BoK was established in 1991 as a conventional bank, it commenced its Islamic operations in 2003 when an alliance of religious parties formed a coalition government in the then NWFP. Recently, the management’s active promotion of the bank’s Islamic banking wing has gained momentum.

Tuesday’s event seemed to be part of the drive to attract Karachi-based businessmen (there were no female participants) to Islamic operations of BoK. Addressing the meeting, BoK’s Shariah Supervisory Committee member Syed Muhammad Abbas spoke at length about the ills of riba and the virtues of interest-free banking.

Abbas said conventional banking constitutes ‘riba’ that is strictly forbidden in Islam. He went on to quote from correspondence between Allama Iqbal and Quaid-e-Azam to suggest that the founder of Pakistan envisioned the country’s economic system to be interest-free.

Endorsing his views about the benefits of Islamic banking, State Bank of Pakistan (SBP) Director Yavar Moini said Shariah-compliant banking was asset-backed and emerged relatively unscathed from the global recession of 2008-09.

The SBP has been actively promoting Islamic banking of late. Despite being the regulator of both conventional and Islamic banking institutions, it has been encouraging the general public through newspaper advertisements to adopt Shariah-compliant banking solutions.

Its promotion of the business activities of one segment of the banking system at the expense of another has led many observers to question its impartiality as a regulator.

Praising their resilience and business acumen, K-P Finance Minister Muzaffar Said stated the businessmen of Karachi should support BoK and help in the development of the province.

Published in The Express Tribune, January 21^st, 2015.

Like Business on Facebook, follow @TribuneBiz on Twitter to stay informed and join in the conversation.