Deputy Governor of the State Bank of Pakistan Sima Kamil on Tuesday said that the central bank aims to expand the share of Islamic banking to up to 35% in the next two years. At present, 20% of commercial banks have adopted Islamic banking.
Kamil said this while addressing a seminar on Islamic banking and economic development organized by a local bank.
She said that Pakistan is working on its own Islamic banking model and what was once a private bank can now become a fully Islamic bank. If any bank wishes to Islamize its 100, 200, or 300 branches, the State Bank would provide them with this facility, she added.
Kamil said that in addition to raising awareness about Islamic banking and training banking staff, Shariah scholars are also needed.
“People’s interest in Islamic banking is increasing and it is improving their quality of life,” she said. The SBP deputy governor highlighted the accessible nature and facilities available through Islamic banking.
However, she said that the task of shifting from conventional banking to Islamic banking is challenging. “The State Bank of Pakistan is fully cooperating in this regard and we will come up with revised work to improve this shift,” she added.
The deputy governor added that the State Bank has established two sectors in its Islamic banking structure, one of which is Islamic finance and the other is Islamic development.
“Converting Islamic banking data into a workable plan was a daunting task,” said the SBP deputy governor, adding that technology today has made it possible to convert data into policies. This data helps in providing convenience based on the needs and wants of the users, she explained.
Further, Kamil said that alternatives to fintech and technology-based banking are emerging, due to which the activities of the banking sector may shift to alternative sectors in Pakistan as well. Thus, there is a tendency for a decrease in the market share.
