IFN Roadshow at Karachi

yaseenAddressing opening session of the Islamic Finance News Pakistan Roadshow held in Karachi, Yaseen Anwar, Governor, State Bank of Pakistan said Islamic banking in the country has witnessed significant growth during the last decade and now constitutes nearly 10% of the country’s banking system with an asset base of over Rs900 billion and a network of more than 1,100 branches. “This expansionary trend is likely to continue and the industry is well set to double its market share by 2020”, he added.

The Governor said the unprecedented growth of the Islamic finance industry can be attributed to dedicated efforts and supporting regulatory framework, contribution by Shariah and academic institutions along with the presence of diversified players in the field, i.e., Islamic banks, investment banks, Takaful companies, Islamic fund management companies and Islamic brokerage houses.

Yaseen Anwar also said Pakistan has remained at the fore front in promoting Islamic finance by being a key member of International Islamic finance institutions established to develop necessary legal, regulatory, supervisory and Shariah compliant infrastructure for Islamic finance institutions. He said that Pakistan’s active engagement with the Islamic Financial Services Board (IFSB), the Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI), the International Islamic Financial Market (IIFM) and collaboration with other central banks has helped the growth of the Islamic banking industry both locally and at the global level.

For the promotion of Islamic finance as a viable and competitive component of the financial system SBP has developed a five-year Strategic Plan for Islamic banking industry through a rigorous and meaningful consultation with all key stakeholders. The plan lays down the future road map of the industry, highlights areas of improvement in legal, regulatory and taxation environments, emphasizes diversification of products and markets covering non-traditional but strategically important sectors of agriculture and SMEs and increasing the Islamic banking market share to over 15% of the country’s banking system over the next five years.

The most interesting part of this Roadshaow was panel discussions. The selection of topics, moderators and panelists was apt and discussions were focused. This enabled the participants to comprehend the discussion.

The most interactive session was ‘Pakistan’s Sustainable Growth and Development in Islamic Finance Market’. It was moderated by Zulfikar Khokhar, Additional Director and head of policy division at Islamic Banking Department of the central bank. Panelists were Ashraf Khan, Executive Director SBP, Hasan Bilgrami, CEO Bankislami, Irfan Siddiqui, President Meezan Bank, M. A. Mannan, Executive Director Silkbank and Syed Najmul Hussain, Partner KPMG Taseer Hadi & Company. The bottomline reached was that country enjoys enormous potential which can be exploited by offering appropriate asset and liability products and further extending outreach of the players.

Second Panel discussion ‘Accessing the Growth Potential for Shariah Compliant retail and Commercial Banking Products’ was moderated by Arif Sultan, Regional Director (Asia), Ideal Ratings. The panelists included Sirajuddin Aziz, President Habibmetro Bank, Wasim Shifi Global Head of Islamic banking and Chief Executive Officer Standard Chartered Saadiq, Malaysia, Ahmed Ali Siddiqui EVP and Head of Product Development and Shariah Compliance Meezan Bank and Zubair Shaikh SEVP and Head of Islamic Banking, National Bank of Pakistan.

An equally good but more inspiring session was ‘Legal and Taxation Issues in the Current Islamic Banking Regime’ moderated by Dr Zeeshan Ahmed, Associate Professor at KSBL. Panelists included Daniyal Mufti of Dar Al Sharia, Ishaq Shah of Ahmed and Qazi, Mujeeb Baig of MCB Bank, Najeeb Khan Shariah Advisor Habibmetro Bank and Omar Mustafa Ansari, Partner, Assurance and Islamic Financial Services Ernst & Young. The discussion was listened very carefully by all as it pertained to ‘profitability’ of institutions offering Shariah compliant products and services.

The last discussion on Recent Regulatory Development and Growth of Islamic Capital Market in Pakistan was moderated by Azeem Pirani, regional Head EWU and panelists included Dr Adnan Aziz Managing Director IRM, Haroon Askari, DMD Karachi Stock Exchange, Mohammad Shoaib Ibrahim, CEO, First Habib Modaraba. Now Pakistan has around 200 companies declared ‘Shariah compliant and KMI-30 index that offer fairly good opportunities to earn Riba free income.


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