Is­lamic bank­ing’s com­mend­able growth

Pakistan Observer - - EDITORIALS & COMMENTS -

THE

Eco­nomic Sur­vey also shows that the as­set base of Is­lamic Bank ing In­dus­try (IBI) dur­ing the cal­en­dar year 2015 stood at Rs. 1.61 tril­lion com­pared to Rs. 1.3 tril­lion in 2014, reg­is­ter­ing a growth of 27.87 per­cent. The de­posits of the IBI reached to Rs. 1.4 tril­lion dur­ing the year as against Rs. 1.1 tril­lion a year ago.

The data is re­flec­tive of grow­ing pop­u­lar­ity of Is­lamic bank­ing in Pak­istan and faith of the peo­ple in the Is­lamic modes of fi­nanc­ing. Pak­istan’s over­all bank­ing sec­tor is vi­brant but these fig­ures point to a grad­ual but wel­come shift to­wards Is­lamic bank­ing, which is con­sid­ered to be the best so­lu­tion to the present-day ills of the econ­omy. Go­ing by the fact that Pak­istan has be­gun its jour­ney in Is­lamic bank­ing some­what re­cently, this is of course, im­pres­sive growth of the sec­tor. The per­mis­sion to Is­lamic bank­ing sys­tem to op­er­ate in par­al­lel with the con­ven­tional bank­ing has pro­vided a choice to the con­sumers. A large num­ber of Pak­ista­nis have been eva­sive to the com­mer­cial bank­ing be­cause of their strong be­lief against Riba-based bank­ing. These in­di­vid­u­als and firms - mainly mid­dle and low class - now have the op­por­tu­nity to in­vest in trade and busi­nesses by avail­ing of loans from Is­lamic banks and thus ex­pand eco­nomic ac­tiv­ity and em­ploy­ment. Sev­eral full-fledged Is­lamic banks have al­ready opened the doors for busi­ness and many con­ven­tional banks have in­sti­tuted branches ex­clu­sively ded­i­cated to Is­lamic bank­ing prod­ucts and ser­vices. We be­lieve that this growth in Is­lamic bank­ing is the di­rect re­sult of the Strate­gic Plan of the State Bank of Pak­istan, which crys­tal­lized rel­e­vant is­sues and pro­vided guide­lines for growth of the sec­tor in the coun­try. How­ever, it has been ob­served that the pace of con­for­ma­tion of Is­lamic modes of fi­nanc­ing to Shariah re­quire­ments has not been sat­is­fac­tory and with this in view there is need for in­ten­sive in­ter­ac­tion be­tween fi­nan­cial ex­perts and Is­lamic schol­ars to place Is­lamic bank­ing on firm foot­ings.

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