Sindh Bank opens Islamic branch
In an effort to rid the economy of the ‘curse’ of interest, the State Bank of Pakistan Deputy Governor, Saeed Ahmad inaugurated the first Islamic banking branch of Sindh Bank in Karachi.
Sindh Bank has received permission to set up five Islamic banking branches. Bank President Muhammad Bilal Sheikh announced that four dedicated Islamic branches would become operational within two to three months.
Speaking on the occasion, the SBP deputy governor said Islamic banking institutions had attracted deposits in large numbers, which shows people consider Shariah-compliant banking as trustworthy.
Deposits of the Islamic banking industry stood at Rs872 billion at the end of the first quarter of 2014, up 23.8% from March 2013. The market share of the Islamic banking industry’s deposits in the overall banking industry stood at 10.7% in March, up 1% from the market share of 9.7% a year ago.
“Islamic banks and banks with Islamic window operations have high deposits, but the investment avenues available to them remain limited,” he said, adding that big infrastructure projects undertaken by the government should be financed through Islamic means.
Sindh Bank has posted a substantial improvement in its key financial indicators despite being a fairly new entity. Its pre-tax profit was Rs287 million at the end of the first quarter of the current year, up 33.2% from March 2013.
Its deposits increased 40.7% over the same period to Rs48.3 billion on March 31. Sindh Bank’s advances amount to Rs32.8 billion, which is 44.7% higher than the amount of advances made until March 2013.