KARACHI: Federal minister for Finance Muhammad Ishaq Dar has assured full support to establish centre of excellence in Islamic Finance education.
This he said while speaking at the opening ceremony of proposals, received to establish a Centre of Excellence for Islamic Finance Education here on Wednesday.
He expressed his pleasure over the efforts being made swiftly to create the Centre that was announced last year.
He said, “I would like to extend my special appreciation to the State Bank of Pakistan for supporting such initiatives.
I am optimistic that this Centre will further strengthen the foundations of Islamic finance in the country through rigorous research and by addressing the challenge of the dearth of human resources”.
The Minister said that rapidly increasing presence of Islamic finance around the globe is a long awaited development needed to address the issues created by the interest-based financial system.
He said, “Looking at the major jurisdictions in the world now promoting Islamic finance, whilst leading policy makers and regulators begin to take a serious look at a Shariah compliant system as a viable alternative to remedy the flawed financial architecture of today, gives me a great deal of pride as a Muslim”.
The Finance Minister Ishaq Dar showed his commitment to facilitate the development of the Islamic finance industry by creating an enabling environment.
“After coming to power, the Government constituted a high level Steering Committee for the Promotion of Islamic Banking in the country.
Through this Committee we have brought all stakeholders together on one platform to devise strategy and develop practical solutions for the challenges with which the industry is confronted,” he said.
The Governor, State Bank of Pakistan (SBP), Ashraf Mahmood Wathra in his welcome address said that Islamic finance has witnessed tremendous growth in the last four decades and its outreach currently spans across the globe, with an asset base of US$ 1.8 trillion.
“Having established itself as a viable alternative during the last financial crises, standard-setting bodies are increasingly viewing Islamic finance as means to promote broad-based, inclusive economic growth”, he said.
Islamic banking industry in Pakistan has also grown significantly since its re-launch in 2001. He added that given its growth trend, growing interest in this banking segment and commitment of the Government, the future outlook of the industry looks quite positive.
The industry is likely to exceed the target of acquiring a 15 percent share in the overall banking industry by 2018 as envisaged in its strategy plan 2014-18.
Governor Wathra, however, indicated that despite showing significant growth, Islamic banking industry in Pakistan is still confronted with a number of challenges.
“Among these, shortage of qualified Islamic finance professionals, who can lead the industry into the next level of growth and development is one of the biggest challenges faced by the industry”, he remarked.
Adding further he said that Islamic finance industry in Pakistan needs to enhance and upgrade its human capital base including Shariah scholars, financial experts, economists, academicians and researchers to realise the true market potential and emerge as a formidable player in the arena.
Earlier, the Steering Committee for the Promotion of Islamic banking constituted by the Government of Pakistan in December 2013, presented its Interim Progress Report to the Finance Minister.
The ceremony was attended by the Governor, SBP, members of the Steering Committee, Presidents/ CEOs of Islamic banking institutions, Takaful and Modaraba companies, Shariah scholars, academia and members of the Chambers of Commerce & Industry.
The Chairman of the Steering Committee, Saeed Ahmad, apprised the Finance Minister about the action plans identified by the Committee under its Terms of Reference.
He said that significant progress has been made on key priority areas including review of legal, regulatory and taxation frameworks, developing liquidity management solutions, developing solutions for conversion of government debt into Shariah compliant financing, development of an Islamic capital market, reforms in the Modaraba sector, and establishment of a Centre of Excellence in Islamic Finance.
The Committee having representation of all key stakeholders including the Islamic banking industry, Shariah fraternity, private sector and regulators has made significant efforts towards formulation of recommendations for promoting Islamic finance in the country.
The Finance Minister lauded the Committee for its achievements and, given its challenging task, extended the life of the Committee for another year.
The Finance Minister assured the Government’s support towards the goal of eliminating Riba from the economy and reiterated the need for timely execution of the Committee’s recommendations.