Inclusive Islamic financial system is our final destination: Jameel



The central bank governor said that the principles of Islamic finance could help in embracing the United Nations’ Sustainable Development Goals (SDGs), a statement recently.

“Our final destination is to have an inclusive Islamic financial system that meets the Maqasid-e-Shariah (objectives of Shariah) and expectations of stakeholders,” State Bank of Pakistan Governor Jameel Ahmad said at a public lecture on ‘SDGs and Islamic finance philosophy: the way forward’.

On the occasion of the 41st Council meeting of the Islamic Financial Services Board, which took place in Islamabad, this lecture session was held as a high-level side event.

“The UN SDGs are fully aligned with the Maqasid; be it poverty reduction or financial inclusion; health or education; environment protection or availability of infrastructure; gender diversity or low-cost housing; all are 100 percent aligned with Maqasid-e-Shariah,” Ahmad added.

He advised banks to reap the untapped potential of Islamic banking as there exists a huge demand for the same in the country. He assured the banks’ CEOs and Presidents that SBP would continue supporting them through a conducive policy and regulatory framework, fully aligned to promote Islamic finance.

The first public lecture was delivered by a renowned international Islamic finance scholar, Dr Sami Ibrahim Al Suwailem, Chief Economist Islamic Development Bank. In his lecture, he shared his thoughts on the role of Islamic finance in actualising SDGs.

He said that the whole concept of sustainable development was based on the ability to see the future enough to plan and sustain resources, not only for this generation but for the coming generations as well. “Moral values help to balance the present versus the future. The lack of this balance is a significant factor behind the environmental threats that humanity faces today,” he added.

Irfan Siddiqui – Founding President and CEO of Meezan Bank spoke on various topics including the correct implementation of UN SDGs, the need for Riba-free financial services, and greater Islamic financial inclusion in the country. He elaborated on how the concepts of sustainability were intrinsically weaved into Islamic teachings.

He concluded his address with a summary of the various initiatives taken by Meezan Bank towards quality education, green energy, poverty reduction, and the development of sustainable infrastructure.

The SBP hosted the IFSB meeting. It was presided over by the SBP governor, who is also the chairman of the IFSB council for 2022. The meeting was attended by the governors and senior officials of the central banks. During this meeting, the council held discussions and made various strategic and policy-level decisions for IFSB.

The SBP also hosted the IFSB members and industry engagement session on December 14. In the industry engagement session, the secretary general of IFSB apprised the participants about the activities of IFSB and the benefits available to its members in different membership categories.

The event was attended by CEOs of banks and non-banking financial institutions, asset management companies, brokerage firms, and academic institutions. On this occasion, Deputy Governor, Sima Kamil also shared her thoughts about current growth trends of Islamic banking in the country and IFSB’s role in the sustainable development of Islamic finance.

During the side events, SBP in collaboration with IFSB also arranged two capacity-building workshops, one each for the banking and non-banking sectors. The capacity-building workshops were attended by over 140 senior-level officials of banks and non-banking financial institutions. The international experts of the IFSB discussed the various prudential standards issued by the IFSB.

Over the years, Islamic finance has witnessed a healthy growth pattern across jurisdictions. According to IFSB’s global Islamic financial services stability report 2022, the total worth of the global Islamic Financial Services Industry (Islamic Banking, Islamic Capital Markets, and Takaful) increased to an estimated $3.06 trillion in 2021 from $2.75 trillion in 2020.

Headquartered in Kuala Lumpur, Malaysia, the IFSB was established in 2003 as an international standard-setting organisation of regulatory and supervisory agencies to promote and enhance the soundness and stability of the global Islamic financial services industry by issuing prudential standards and guiding principles for the Islamic finance industry.—Agencies