Standard Chartered Pakistan to shift to Islamic
Banking
The management of Standard Chartered Pakistan is gearing up
to convert the conventional bank into a comprehensive Islamic bank. This strategic
move aims to capitalize on the growing demand and acceptance of
Shariah-compliant banking services across Pakistan.
In preparation for this transformation, the bank's
management conducted multiple sessions in 2023 to update the board of directors
and executive committees on the progress. Additionally, the bank organized
extensive training sessions for its 2,000 employees, covering 43 different
courses on Islamic banking products and services.
Industry insiders suggest that once the preparation phase is
complete, the bank's management plans to submit its conversion proposal to the
State Bank of Pakistan (SBP) and subsequently apply for an Islamic banking
license.
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Currently, Standard Chartered operates 2 Islamic banking
branches and 38 Islamic banking windows within its conventional branches across
10 cities. It also boasts 112 ATMs and 20 CDMs. According to the annual report,
the bank recorded a profit of Rs. 10.6 billion from its Islamic banking
operations out of a total after-tax profit of Rs. 42.6 billion.
Listed on the Pakistan Stock Exchange, Standard Chartered
Pakistan has played a significant role as a lead and joint advisor for
Pakistan's Sukuk issuances worth $1 billion in the foreign market in 2017 and
2022. Notably, it was the first international bank to obtain an Islamic banking
license in Pakistan two decades ago, pioneering the launch of the Saadiq
Islamic banking branch. The bank also introduced the Saadiq Islamic Credit
Card, a unique offering in the country's Islamic banking landscape.
Standard
Chartered Bank earns profit before tax of Rs. 89.2 billion
Rehan Shaikh, President and CEO of Standard Chartered Bank
Pakistan, brings robust expertise in Islamic banking, having previously served
as the Global CEO of Standard Chartered Bank's Islamic banking operations.
Furthermore, the Shariah board of the bank has recommended
recruiting relevant talent across different segments to achieve the conversion
target within the bank's internal timeline. The bank is also advised to align
its strategy with SBP's strategic plan for 2023–2028, particularly concerning
the transition to a Shariah-compliant banking system.
In accordance with directives from the Federal Shariat
Court, all conventional banks and financial institutions are mandated to phase
out interest-based systems within the next five years. Several banks, including
Bank Mukramah Limited (formerly Summit Bank), Zarai Taraqiati Bank Limited, and
Bank of Punjab (BoP), have initiated their transformation plans from
conventional to Islamic banking.
Source: Pro Pakistani