Experts stress need to promote Islamic banking
Senior bankers and experts said Islamic banking system could replace the conventional banking system as World Bank has introduced a separate section of Islamic banking while IMF was reviewing the Islamic banking system.
Expressing their views at discussion on Islamic financial literacy organized by Pakistan Business Forum at Expo center, they said Islamic banking volume in world banking is $2 trillion and World Bank has a section on Islamic banking. They said United Nations has also sought information from banking researchers with regard to Islamic banking.
Islamic banking has been recognised not only in Muslim countries but also at international level and expressed hope that Islamic banking will replace the present conventional banking system if serious efforts are made by the Muslim countries in future.
They said present Islamic banking share in Pakistan's banking sector is about 15 percent to 16 percent however the volume of Islamic banking could rise to 50 percent within 10 years if government supports the Islamic banking system. Chairman Bank Islami's sharia supervisory board, Mufti Irshad Ahmed Ejaz said Islamic banking has introduced noninterest based business, trade, partnership, rent and other aspects as per sharia laws. He said Islamic banking had been initiated in Indo-Pak sub-continent during in 1930s but it started working in 80s and 90s.
Mufti Irshad, who is also chairman sharia advisory board of State bank of Pakistan, said
Islamic banking sector in Pakistan is at institutional phase and need complete government supervision and continuation of reforms in such sector. He said Islamic banking will replace the conventional banking system if serious efforts were made by the Muslim countries in next 10 to 15 years.
Responding on query about the volume of Islamic banking in Pakistan banking system, he said SBP was making effort for promoting the Islamic banking system. He said government and public sector institutions and traders will have to come forward to promote the Islamic banking as Islamic banking could not be succeeded until its share is increased more than 50 percent in present banking system. He called for legislation on Islamic banking and institutional support by the government.
Meezan Bank's executive vice president and head of sharia audit and advisory Farhanul Haq Usmani said Islamic banking concept has now been acceptable in Muslim countries and societies and banking could be made through non-interest basis.
AAOIFI general secretary Umar Mustafa Ansari said as many as 23 countries have adopted the standard of his organization with regard to Islamic financing and urged the need of highlighting the concept of Islamic banking in Muslim countries.
He said that Islamic banking volume has increased up to $2 trillion and now Muslim countries have option of noninterest based banking. Jamaat-e-Islami Sindh chapters chief Mohammad Hussain Mehanti also spoke on the occasion.