SECP to seek SBP guidance on Islamic finance

Muhammad Yasir

Security Exchange Commission of Pakistan (SECP) will take advisory from Sharia board of State Bank of Pakistan (SBP) on Islamic Finance including its including modaraba, leasing companies and Islamic indices of capital market, Islamic mutual funds, Islamic pension funds, takaful operators and other financial institutions.

SECP has recently dissolved its Sharia Advisory Board (SAB) that it constituted to cater the emerging financial market. The decision was made on the directives of Chairman Zafar-ul-Haq Hijazi who assumed his charges last month.

The reason for dissolution of Shariah Advisory Board was to adopt a unified approach on development of Islamic Finance in Pakistan, official spokesman said.

State Bank has a well established Shariah Advisory Board of highly respected Shariah Scholars who have worked for the development of Islamic finance in other countries also specially Malaysia and Bahrain. In order to have a focused approach services of Shariah Advisory Board of State Bank of Pakistan will be utilized on need basis by the commission.

The nine members of, "the SAB of the SECP" included prominent Shariah Ulemas, a jurist, an accountant and representatives of the commission. Each member of the SAB is qualified individual with in-depth knowledge and experience of Islamic accounting, finance, economics and Shariah law. Bankers and sharia scholars demanded that their fraternity should be given protection and confidence to promote Islamic banking and financial service industry in the country, otherwise the government's program of financial inclusion will not be taken place successfully through promotion of Islamic banking.

In every country, specialists are being appointed on the subject matter hence scholars are expert of Sharia financing and laws, and their services are well enough to promote Islamic banking and financing.

Ulema along with financial experts have designed various products and services in the board however no project has been materialized so far due to the absence of SECP full-time chief, a banker of Islamic banking industry said adding it seemed that regulatory wasted time of itself and others.

They were of the view that direc- tors of Islamic Banking Division at State Bank of Pakistan (SBP) have been changed frequently which slowed down the ongoing proceeding of banks in the industry.