Islamic banking and finance in Pakistan targets are required to be set a fresh
Islamic Banking Industry in Pakistan has grown at a fast pace ever since its re-launch in 2001. Starting from almost scratch the Islamic banking industry now represents 11-12 % of overall banking system with 19 banking institutions offering Islamic banking products and services.
State Bank of Pakistan (SBP) initiated three-prong strategy in 2001 and facilitated setting up of (i) Islamic Banks (ii) Islamic Banking subsidiaries of commercial banks and (iii) dedicated Islamic banking branches by the conventional commercial banks. During the period, SBP has issued detailed licensing criteria, instructions and guidelines for Shariah compliance, instructions for Profit & Loss Distribution and Pool Management and also adopted few IFSB prudential and AAOIFI Shariah standards. Although industry has shown rapid growth, there are still areas which require concerted and proactive efforts by stakeholders to further develop and nurture the industry. To augment the existing growth momentum and to lead the industry to the higher level of professionalism, SBP had already issued “Strategic Plan for- Islamic Banking Industry of Pakistan 2014 – 2018”. The plan focuses on initiatives necessary for improving public perception of Islamic banking and promoting it as a distinct and viable system to address the financial services need of the public in general and business community in particular. The strategic plan consists of (a) Vision, (b) Mission, (c) Values, (d) Functional Strategies and (e) Action Plans. The strategies and the action plans have been developed keeping in view the strengths, weaknesses, opportunities and threats to the industry.
SBP over the next five years in collaboration with stakeholders has tried to keep its focus on the following key areas/objectives to facilitate and catalyze stable and distinct growth of Islamic banking in Pakistan: A. Enabling Policy Environment B. Shariah Governance & Compliance C. Awareness and Capacity Building D. Market Development The functional strategies and action plan for achieving objectives in each area have been developed in consultation with the Islamic Banking Institutions and their Shariah advisors, SBP Shariah Board members, academicians, internal SBP departments, Securities and Exchange Commission of Pakistan iv (SECP) and Institute of Chartered Accountants of Pakistan (ICAP).
It is expected that with the implementation of this strategic plan, Islamic banking industry would have grown prudently and distinctly with enhanced acceptance and confidence of the general masses contributing in the economic development of the country. However the final year of strategic plan i.e. 2018 have arrived so need has arisen to review the whole position and to correct lapses where they have been made. 2018 is expected to be the year of start of new government in Islamabad and ironically the same year is the year to asses where we stand in Islamic Banking and Finance today and where we have to go.