Islamic finance mode ready to replace conventional: conference told


KARACHI: The third ‘Islamic Finance Expo and Conference 2014′ was commenced on Thursday, with a consensus that it’s time for Islamic mode to take over the banking and financial sector.

The event was organized by the Publicity Channel to promote the concept of Islamic finance and discusses opportunities and challenges, being faced by the sector in current diversifying situations. State Bank of Pakistan (SBP) Acting Governor Ashraf Mahmood Wathra and

Mufti-e-Azam Pakistan Moulana Mufti Rafi Usmani graced the event with their presence.

In his address, SBP acting governor stressed the need to further pace up the extension of Islamic banking. He said that the future of Islamic banking in Pakistan, as well as across the global, is very positive. We should focus on improving the perception of Islamic

banking in our society. He hailed the role of Islamic banks and stated that recently taken measures by the Islamic banks for promotion of Sharia based banking are viable and significant.

Responding to the queries of distinguished guests, he agreed that Islamic banking could play a vital role in reduction of crises, including energy crises, which directly hit the labour class of the society. In this regard, he said that finance for solar panels would be made through Islamic banks.

He said that the government is already supporting local youth for entrepreneurship and furthermore the suggestion for loaning to youngsters through Islamic banks would be considered seriously. He also agreed to include cool chains in the finance circles of Islamic

banking as warehouses were already enjoying the facility.

To a question, he said that SBP could not make obligatory for banks to increase their CSR from five to 10 percent, however, banks should improve their percentage of CSR.He further said growth of Islamic Banking is faster than conventional banking in the country. He presented the example of Summit and Faysal Bank which are going to be converted into totally Islamic banking.

Mufti Rafi Usmani, in his eye opener address, said that though the Islamic Banking sector has yet to become flagged Islamic banking, it has achieved the milestone of interest free banking, which is admirable.

He claimed that with the grace of Allah Almighty, local Islamic banking sector has groomed enough itself to replace the entire conventional banking. He urged the government to transform the banking mode on governmental level through legislation. He was of the view

that the government should now ban the conventional banking immediately.

Rafi Usmani also urged the Islamic banking sector to upgrade itself on Islamic values, instead of blind competition of conventional banks. He also proposed Islamic banks to focus on Small and Medium Enterprises (SMEs) sector. According to him, it would bring an economic revolution in the country. He added that Islamic finance in SMEs sector is the most effective solution of the challenges and problems being faced by the state.

Mirza Ikhtiar Baig, chairman Standing Committee on Banking, FPCCI also addressed the conference. In his speech, he stressed the need to include and focus insurance and agriculture sectors in the Islamic finance sector.

Attique-ur-Rehman, Adviser to KCCI was also present on the occasion. He raised several points before the governor state bank of Pakistan in respect with the promotion and better utilization of Islamic banking sector in the country.

Publicity Channel CEO Naeem Qureshi presented the welcome address. In his address, he stressed the need to take on-board all stakeholders for promotion and creating awareness of the Islamic Finance.

Later at a panel discussion, bankers shed light on various issues of Islamic banking. Talking about the challenge of awareness among masses, they said that Islamic banking itself is based on Islamic principles, however there is a shortage of posing Islamic impressions before masses. They proposed that Islamic banking products should be seemed Islamic, so as to convenes masses. They stressed the need of an Islamic benchmark, which would not be linked with KIBOR.

Bankers told the moot that so far, Islamic banking sector dint focus on marketing, rather  their focus is satisfaction of customers. Hailing the policy, bankers termed it most effective marketing tools. Some of the bankers were of the view that commitment of bankers and teams of Islamic banking with the Islamic mode is mandatory for promotion of the Islamic banking.

Talking about the space for Islamic banking in the society, moot was told that as per conservative estimates, about 30 percent of farmers and agriculture associated traders in Punjab and Khyberpakhtoonkhoa still dint tap into banking just because they believe that

conventional banking is opponent of the Islamic teachings. At other hand 80 percent of conventional banking customers have tendency to convert on Islamic banking, if are provided with suitable circumstances.

The full day event was comprised of several sessions, during which relevant bankers shared their experiences and views about the Islamic banking and our society. During the event Sharia advisers and religious clerics were also taken on board so as to shed light on various aspects of Islamic baking’s alignment with Sharia. On the occasion, various aspects and history of Islamic Capital Markets were discussed.

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