Islamic Bankers have blamed federal government’s lack of support for Islamic Banking and public misconceptions as the main reasons hampering its growth in Pakistan.
A media brief was held at IBA Center of Excellence in Islamic Finance (CEIF) to inform about the upcoming “World Islamic Finance Forum”.
Chairman CEIF and former Governor State Bank of Pakistan Dr. Ishrat Hussain, President Meezan Bank Irfan Siddiqui, Dean IBA Dr. Farrukh Iqbal, MD and CEO of Takaful Pakistan Rizwan Hussain and Director IBA CEIF Ahmed Ali Siddique briefed the media.
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Dr. Ishrat Hussain said that IBs must get the necessary support from the government. He thought there are many areas where conventional banks cannot work and IBs can utilize such untapped market areas.
“IBs can go to lower-class borrowers like Small and Medium Enterprise (SME), Agriculture sector and low-cost housing and help in creating more assets. Diminishing Musharakah is a very good product where credit value of borrower increases gradually,” Dr. Ishrat said.
Dr. Ishrat also said that in a survey it was revealed that about 76% Pakistanis were not willing to borrow in Ribah (interest) but due to misconceptions about IBs, the growth is limited. He added,
When IB was introduced in Pakistan, conventional bankers became Islamic Bankers as there was no institution who could have developed real Islamic Bankers. Now with many centers of excellence, qualified Islamic Bankers are becoming part of the industry and gradually it will pick up momentum.
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During the questions and answers session, Irfan Siddiqui said that government is not providing any support to improve growth in IB in Pakistan. IBs are already offering less rate on budget support borrowing than the conventional banks.
“IBs are giving money to government on -2 percent while government borrows from conventional banks on T bills. With this huge discount, the government is still not willing to borrow from IBs,” Irfan Siddiqui told.
He demanded that the government must issue IB Sukuk auction calendar. The money collected for Hajj pilgrims applications must be deposited in IBs instead of investing it for interest.
World Islamic Finance Forum (WIFF)
Ahmed Ali Siddique told that this forum will be held at a local hotel in Karachi on March 19 and 20. Chairman AAOIFI board of trustees, Shaikh Ebrahim Bin Khalifa Al Khalifa, will be the chief guest.
“Prominent Shari’ah scholars, renowned academicians, Presidents of IBs will address the forum. In two day forum, 17 foreign and 15 Pakistanis will present their papers and address the gathering. Foreign speakers include experts from Bosnia Herzegovina, USA, UK, Turkey and China,” Siddique added.
