ISLAMABAD – Federal Minister for Finance and Revenue Shaukat Tarin highlighted on Monday that Islamic finance promotes financial inclusion by bringing that particular segment in financial ambit, which has consciously excluded themselves due to their faith-related sensitivities.
He stated this while delivering a keynote address via videolink during the Round Table Conference (RTC) organized by the Daily Pakistan Observer on the topic “Islamic Banking-The Way Forward” in Karachi. President of Pakistan Dr. Arif Alvi presided over the RTC.
Among others, Adviser to the PM on Institutional Reforms Dr. Ishrat Hussain, Governor Sindh Mr. Imran Ismail, Governor State Bank of Pakistan Dr. Reza Baqir, Chairperson Pakistan Stock Exchange Shamshad Akhtar, Presidents/CEOs of Private Banks, Chairman Shariah Board and other distinguished guests participated in the RTC. Mr. Faisal Zahid Malik, Editor-in-Chief of the Pakistan Observer, daily newspaper delivered opening remarks on the occasion.
In his remarks, the Finance Minister felicitated the Pakistan Observer, a well-established and a prominent english newspaper for organizing the Fourth Round Table Conference (RTC) on Islamic Banking. He commended the organizers for bringing a wide array of stakeholders of the Islamic banking industry together at the RTC.
The finance minister stated that Islamic finance offers prudent financing options that ensure the transaction is less prone to debt crisis and the funds are employed for their prescribed purpose minimizing defaults.
The Islamic Banking Industry has experienced a healthy progress over the years and the time has come to contemplate upon the ways and means on how to traverse the future path of taking this industry to its next phase of development, he noted.
The Islamic Banking has grown rapidly both in local as well as in international markets and has assumed systematic significance in a number of jurisdictions.
Apart from its faith-based appeal, the increasing interest in Islamic finance industry stems from its strong economic and social considerations. Its skewness towards asset backed and equity based transactions help promote entrepreneur friendliness and consideration of project viability, he added.
Towards the end, the finance minister expressed satisfaction over the progress made by the Islamic Banking since its inception.
The Government of Pakistan has played a pivotal role in the promotion and development of Islamic Banking Industry over the period of time.
The provision of a level playing field to the Islamic Banking and finance industry vis-a-vis the conventional financial system has been one of the priority areas of the present Government.
He said that rhe emergence of Sukuk has been a significant development in Islamic Capital Markets due to its ability to raise financing under shariah permissible modes while maintaining a strong linkage between the real economy and the financial sector.
In case of Pakistan, the Sukuk market has witnessed significant progress as both sovereign and corporate entities have been issuing these instruments.
Tarin also underlined the efforts by the government and the State Bank of Pakistan for facilitating the Islamic Banking Industry through provision of tax neutrality vis-a-vis conventional banking system.
Recognition of SBP’s efforts at the global level by being awarded as the “Best Central Bank to promote Islamic Banking” is another feather in its cap which clearly reflects its better performance in comparison with other regulators around the world in promoting Islamic banking in the country.
He also emphasized upon all stakeholders to explore the potential of Islamic finance in promoting infrastructure development in countries like Pakistan particularly in Public Private Partnership (PPP) delivery framework, he concluded.