State Bank confident to meet 2027 deadline to transition to Islamic economy
The State Bank of Pakistan (SBP) expressed confidence in
achieving the Federal Shariat Court (FSC)'s directive to transition Pakistan's
economy, including its banking sector, to an interest-free model by the stipulated
deadline of December 2027. This directive, issued in April 2022, declared
"riba" (interest) as impermissible in all forms, necessitating a
comprehensive shift to an interest-free economic framework.
Saleem Ullah, Deputy Governor of the SBP, affirmed the
institution's commitment to implementing the court's decision, highlighting the
formation of various committees dedicated to this purpose. He disclosed the
establishment of a high-level steering committee, chaired by the finance
minister and the central bank governor, tasked with overseeing the strategic
implementation of the verdict. Additionally, a committee led by the two deputy
governors has been instituted to supervise the overall transformation process.
Karachi
University and Meezan Bank become partners to promote Islamic banking education
Efforts are underway to review legal and regulatory
frameworks and develop new financial products to ensure compliance with Sharia
principles, particularly in converting public debt into Sharia-compliant
instruments. Ullah expressed optimism, citing collaborative efforts and
structured frameworks as key to meeting the deadline.
During the 2nd National Islamic Economic Forum in Karachi,
the SBP official underscored the unjust nature of interest-based systems and
expressed confidence in accelerating the growth of Islamic banking in Pakistan.
Despite Islamic Banking Industry (IBI) assets and deposits accounting for 19.6%
and 22.5% respectively of the overall financial sector by September's end, the
SBP aims to elevate the Islamic banking system's share to 35% by 2025.
Bank
of Punjab engages KPMG to explore feasibility of Islamic Banking transformation
At the forum, Maulana Bashir Farooqi, founder chairman of
Saylani Trust, advocated for efforts to combat interest-based banking systems.
Meanwhile, Mufti Munib-ur-Rehman urged more aggressive progress toward Islamic
banking, emphasizing the necessity for comprehensive economic planning and direct
establishment of Islamic banks rather than Sharia-compliant branches within
conventional banks.
Source: Arab News