Bahrain’s minister lauds Islamic banking growth in Pakistan

KARACHI: Shaikh Ebrahim Bin Khalifa Al-Khalifa, Bahrain’s Minister for Housing and Chairman Board of Directors Meezan Bank Ltd, has said that Pakistan has huge potential for project based financing in sectors including energy, health, food, pharmaceutical, housing for which Islamic banking industry has more suitable solutions. During a meeting of the senior officials of the State Bank of Pakistan the other day, Shaikh Ebrahim, who is also Chairman Board of Trustees Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI), appreciated Pakistan’s pioneer position in Islamic banking and paid tribute to Mufti Taqi Usmani for his great contribution. Shaikh Ebrahim held a meeting with Deputy Governor SBP Saeed Ahmad during which the deputy governor welcomed his Royal Highness. Shaikh Ebrahim while acknowledging the significant growth of Islamic banking in the country appreciated the role of SBP for establishing a conducive regulatory environment for the industry. He emphasized that the Islamic banking industry needs to play a critical role in enhancing the financial penetration level in the country. He opined that continued research will lead the move from current Shariah compliant products to fully Shariah based products. While focusing on the fundamentals of Islamic banking, he was of the view that the Shariah complaint financial system should make the flow of money to all those sectors critical for the broad based growth of the economy. He stated that the local market of Pakistan has huge potential for project based financing in sectors including energy, health, food, pharmaceutical, housing for which Islamic banking industry has more suitable solutions. Deputy governor SBP appreciated the vision of his Royal Highness. He briefed the guest about various projects and schemes currently being under taken having great potential for local and foreign investors. He reassured SBP’s support for Islamic finance initiatives. The deputy governor SBP repeated the resolve of the present Government of Pakistan and the commitment of SBP in promoting Islamic finance in the country. He discussed SBP’s 5-year strategic plan for Islamic banking industry. Saeed Ahmad said that SBP is considering options to provide a comprehensive facility for Islamic banks to channel their liquidity through Shariah compliant modes. After availability of this facility, Islamic banks will be restricted to channel their surplus funds to conventional banks, failing which regulatory penalty will be imposed. He emphasized that Islamic banks should increase their outreach to SMEs, agriculture and low cost housing sectors. Deputy Governor also appreciated the work of AAOIFI and Shaikh Ebrahim Bin Khalifa Al-Khalifa’s instrumental efforts and his contribution for the promotion of Islamic banking and related accounting and technical matters. (source: Daily Times / 05 March 2014)