Karachi 07: Islamic financial sector stakeholders have urged the ministry of finance to expedite efforts towards issuance of Islamic treasury bills in the shape of Baitul Maal certificates to provide the Islamic banks with an opportunity to invest, as non-availability of such instruments has been posing as a liquidity management issue for Islamic banks. As a result Islamic banks are at a disadvantage compare to conventional banks in terms of optimizing returns on excess liquidity. These views were expressed by the Islamic banking sector stakeholders while speaking at the second day of 3rd WorldAsia Islamic Capital Conference here on Thursday.
Mr. Pervez Said Head of Islamic Banking State bank of Pakistan said that Islamic banks must jointly workout a future plan of action with the regulators for the issuance of Baitul Maal certificates. He said that the success factor behind Islamic banking growth is supportive regulatory framework of state bank of Pakistan. He said that Islamic banks have seen phenomenal growth in last 5 years and they also have a sizeable pipeline of sukuks for near future, which has enormous potential in Pakistani market. He said that Islamic banking industry needs to have standardization of guideline documents so that the industry could work in harmony. He said that in order to facilitate the operations of Islamic banking industry , state bank of Pakistan has allowed the Islamic banks to execute any transaction only with the approval of their Shariah boards without getting prior approval from SBP, the regulators can review and approve the transactions later on.
Ashar Nazim Managing Director Islamic capital partners announced that Islamic capital partners would organize an investor forum in Dubai in May 2008. This investor forum would help bring gulf region investors and Pakistani corporates to explore the investment opportunities in Pakistan. He said that we would organize this conference again in November 2008 in Karachi and we hope that it would also serve to be a good platform for Pakistani financial sector.
Financial experts said that current 3% share of Islamic banking industry needs to grow to up to 25% percent in next decade. Experts said that trained human resource is the biggest challenge being faced by Pakistan Islamic banking industry right now. We need qualified human resource to keep the current pace of growth intact. They also emphasized the need of standardization of guideline documents for Islamic financial sector that would enable the industry to work in harmony.
Speaking at a session on emergence of takaful in Pakistan, the Takaful experts said that we need to move out of niche market syndrome and grab the maximum potential available in the market. They informed that 63% Islamic banking and takaful consumers in Malaysia are non-Muslims, which show the benefits for consumers available in Islamic mode of finance.
Mr. Pervaiz Ahmad CEO Pak-Qatar Family Takaful emphasized the need of synergy in Islamic banks and takaful companies. He said that as compared to India we have very low insurance penetration in Pakistan. He said that the takaful products should be competitively priced and available with best services and being halal should be an added benefit into it.
He said that takaful operators need to bring innovation in business process and product distribution. We also need to focus on development of human resource for the Islamic financial sector.
Faizan Mitha, Senior Executive Vice President Habib Bank, Anwer Sheikh, Chief Executive Access Finance, Irtiza Kazmi, Head of Capital Markets & Syndication, Dubai Islamic Bank Pakistan, Anthony Dutton, of Norton Rose, Captain Jamil Akhtar, Chief Executive Takaful Pakistan, Abdul Rahim Abdul Wahab, Executive Director & Actuary- Acturial consulting Sidat Hyder Morshed Associates (Pvt) Ltd., Mufti Muhammd Mohibul Haq, Shariah Advisor, Mansoor Shakel, Head Central Shariah Group HSBC Ammanah, UAE, Asif Kamal Chairman Trust Investment Bank, Zaigham Mahmood Rizvi, chairman and Managing Director HBFC, Akmal Jamil, CEO Arif Habib Private Equity Fund, Justice Khalilur Rehman, Mufti Zubair Usamani and Mufti Irshad also spoke on the occasion.