Pakistan on way to be leader in Shariah finance

Amanullah Khan

Karachi

The regulatory authorities are actively considering reforms for rationalizing the existing tax problems related to Sukuk and Reits to encourage and boost the confidence of the investors in the Shariah based financing in Pakistan.
Pakistan which is one of the countries where the government and the central bank are taking Islamic banking more seriously, said the World Bank and the Islamic Development Bank, in their first global review of the fast-track movement of the Islamic banking system.
Pakistan and Indonesia are the strongest proponents of incorporating financial inclusion as a policy.
At present, 21 banking institutions are providing Islamic banking services and products, through their 2,322 branches in 112 districts across Pakistan. The SBP which is facilitating the Islamic banking industry with a focus to transform the financial system in Pakistan is providing the enabling policy environment for Shariah governance, risk management and capacity building.” The Islamic Finance News, in 2015, adjudged the SBP as the “Best Central Bank for Promoting Islamic Finance”.
There is stronger growth of Islamic assets of the conventional banks also while the market share of the Islamic assets risen to 33 per cent, up from 14 per cent in 2012.
The demand growth in Pakistan which is a nation of 200 million plus mostly Muslim population for Shariah based financing is also attributed to the strategic approach of the State Bank of Pakistan , the government and the regulator authorities which have created the enabling environment for fast track growth in Islamic Banking.
Top leadership of the Islamic banking and finance sectors are also working with the SECP and SBP on further evolving and promoting Islamic banking across Pakistan
The first-ever Islamic banking report issued last week by the World Bank and Islamic Development Bank said that the fact that a strategic roadmap on a national level is in place in jurisdictions. These jurisdictions include Indonesia, Malaysia and Pakistan, indicating that the governments in those countries are no longer taking Islamic financing lightly.