The Islamic Finance News (IFN), an arm of REDmoney Group, Malaysia declared the State Bank of Pakistan (SBP) as the best Central Bank in Islamic Finance for 2021, as it announced the results of its global voting on Thursday.
#SBP wins for 2nd consecutive year, Islamic Finance News (IFN) global award as Best Central Bank in Islamic Finance for 2021. IFN stated that with Governor Dr. Reza Baqir as Chairman of Council of Islamic Financial Services Board they expect even stronger leadership from SBP.
— SBP (@StateBank_Pak) January 13, 2022
The IFN Best Banks Poll is regarded as one of the prestigious accolades in the global Islamic finance space.
Bank Negara Malaysia stood second while the Saudi Central Bank secured the third position.
Under the category of the Best Central Bank in promoting Islamic finance, banking regulators closely contest for supremacy through exceptional advances made during the year.
SBP has won this award for the 5th time during the last seven years.
Previously, SBP was bestowed with this coveted award for the years 2015, 2017, 2018, and 2020. IFN in its cover story congratulated SBP for yet another win as the Best Central Bank in promoting Islamic finance, and stated that they welcomed back a leading light of the industry.
In a closely fought contest, 2020’s victor came roaring back to take the crown, said IFN. Announcing the poll result, IFN also stated that with its Governor Dr. Reza Baqir, recently promoted to be the new chairman of the Council of the IFSB from his role as the Deputy Chairman in 2021, they can hopefully look forward to even stronger support and leadership from the central bank over the coming year.
The IFN Award to SBP is the global endorsement of its initiatives for the promotion of Islamic banking in the country. The award reflects international recognition of the strategic measures undertaken by SBP to put in place a robust policy environment for Islamic banking to prosper.
SBP has consistently promoted and encouraged Islamic finance within Pakistan and has taken several significant steps. These include the launch of the 3rd five-year Strategic Plan for Islamic banking 2021-25, Shariah-compliant standing ceiling facility and open market operations, strengthening of Shariah governance mechanism, Shariah-compliant regulations for the lender of the last resort (LOLR) facility, and licensing regime for digital banking covering the Islamic segment; besides taking initiatives for promoting better awareness amongst the masses and strengthening international linkages.
The Strategic plan 2021-25 envisages taking an Islamic banking share of 30 percent in terms of assets and 35 percent in terms of deposits in the overall banking system.
Amidst the COVID-19 chaos throwing unforeseen challenges to the global financial market, the Islamic banking industry in Pakistan continued to maintain its impressive growth trajectory, and assets and deposits of the Islamic banking industry grew on a year-on-year basis by 28.2 percent and 26 percent respectively by September 30, 2021.
The market share of Islamic banking assets and deposits stood at 17% and 18.6% respectively of the overall banking system in the country as of September 30, 2021. The industry operates through a huge network of 3,651 branches and 1,579 Islamic banking windows (dedicated counters at conventional branches) steered by twenty-two (22) Islamic Banking Institutions (IBIs) which include 5 full-fledged Islamic banks and 17 conventional banks having dedicated Islamic Banking Branches and windows.
The industry is growing on the back of continued support by the Government of Pakistan which remains committed to providing an enabling platform for this industry to operate.
