Pakistan Mercantile Exchange Limited (PMEX), the country’s only multi-commodity futures exchange, has facilitated Pakistan’s first electronic Murabaha transaction, which in essence will pave the way for an Islamic Money Market.
This is a landmark achievement in the history of Pakistan, which has the potential of bringing Islamic banks on par with their conventional counterparts in terms of managing excess liquidity in a convenient, transparent and Shariah-compliant manner.
Islamic Financial Institution’s (IFI’s) can utilize this facility to deploy liquidity to all potential segments, including the government.
The product will not only allow the country’s Islamic Financial Industry to manage their liquidity needs but would also provide opportunity to banks as well as the government to meet their financial needs in a Shariah-compliant manner in addition to enabling SBP to offer Shariah-compliant liquidity management solutions to banks.
The first electronic commodity Murabaha transaction was conducted between Meezan Bank Limited (MBL) and Dubai Islamic Bank Pakistan Limited (DIBPL) on December 26th, 2017.
PMEX’s Sharia Compliant Trading Platform, developed to facilitate Electronic Commodity Murabaha, is a prime example where all stakeholders, i.e. Regulators (both SECP & SBP), Financial Industry Players, Sharia Scholars and Private Sector Institutions have come together, with the Exchange at the core, for this landmark achievement, said Managing Director of PMEX, Mr. Ejaz Ali Shah.
Over three and a half years of perseverance by the exchange has translated into an ecosystem which will keep bearing fruits for years to come.
Fully Shariah-Compliant
The exchange has ensured, in consultation with its Sharia Advisor Dr. Imran Usmani who is also the Resident Shariah Board Member of Meezan Bank, that the product is completely Shariah-compliant.
The product has been vetted by Sharia Board of State Bank of Pakistan (SBP) Chaired by Respected Justice (R) Muhammad Taqi Usmani, Securities & Exchange Commission of Pakistan (SECP) and Islamic Banking Sub Committee of Pakistan Banks’ Association.
Meezan Bank was the Shariah Technical Services Provider for development of this landmark Shariah-compliant trading platform at PMEX.
Meezan Bank’s President and CEO, Irfan Siddiqui said
Management of excess liquidity has always been a key challenge for Islamic banks. This product provides an avenue through which not only banks, but also the Government will be able to raise liquidity, with ease, in a completely Shariah-compliant manner.
Pakistan’s Ballooning Islamic Finances
The country’s Islamic financial sector is growing at a rapid pace of over 20% over the last 5 years with an asset & deposit base of over Rs. 2 trillion and Rs. 1.7 trillion respectively.
PMEX believes that the evolution of this product would not have been possible without the guidance and support of SECP, SBP, PMEX Board, Meezan Bank who is PMEX Shariah Technical Services Provider, as well as Dubai Islamic Bank Pakistan Limited and Hascol Petroleum Limited.
The exchange is confident that, based on the keen interest and enthusiasm of the IFI, Commodity Murabaha would strengthen the Islamic financial sector of the country, eventually serving as an industry benchmark and first choice for the IFI’s.
Islamic Banking k naam pe logo ko chutya banana ye kahan ka Islam hai. No one in Pakistan is doing banking in a islamic way as there is no concept of banking in Islam. In say bas Islam main gunjayish paida karwa lo.
Please try to understand before you comment. saying that there is no concept of banking in islam is a huge statement and can only be given by someone who understands Islam completely. I hope you understand the consequences of misquoting Islam.