Business and Commercial activities should be coherent with Shariah Corridor and Islamic financial laws: Shah Faisal Afridi
Lahore, September 23, 2015 (PPI-OT):“Business and Commercial activities should be coherent with the Shariah Corridor and Islamic financial laws” it was stated by President Pak-China Joint Chamber of Commerce and Industry, Shah Faisal Afridi In a press statement issued today. While referring to the Global Islamic Finance Report he said that Pakistan ranks number nine in the world in terms of development of the Islamic financial services industry in the country”. He mentioned that the country is second largest Islamic market (population-wise) after Indonesia, and can become the most important player in Islamic banking and finance, if it attains 20% market share”.
He said that the time has come where we should look ahead and concentrate to develop innovative products which are more towards perfection and purity rather only towards mere permissibility by Shariah. He also stressed on the strong role of Shariah Advisors in making the Islamic banking more Shairah compliant. He also stated that the Islamic Financial System has the potential to provide better banking and financial services than the conventional system, provided it capitalizes on its own inherent strengths and avoids following the conventional system.
He said that according to the report Pakistan comes after eight countries, namely Iran, Malaysia, Saudi Arabia, Bahrain, Kuwait, United Arab Emirates (UAE), Indonesia and Sudan. Growth of Islamic banking in the country has been over 30% in the last few years, which is certainly above the average global growth rate of Islamic banking and finance. If this trend continues, then one should expect that in the next three years Islamic banking assets will at least double from its current size of Rs 926 billion, mentioned Afridi.
“If that happens, the country will stand next to a number of Gulf countries and Malaysia where Islamic banking represents between 20% and 30% of the market share” he added that the growth in Islamic banking has been phenomenal over a period of last 7/8 years. At present, there are more than 600 Islamic banking branches throughout Pakistan and 19 Islamic banking institutions are offering Islamic commercial banking services, informed Afridi. He appreciated the new Islamic banking strategy by the State Bank of Pakistan to double the number of Islamic banking branches from 1,200 in the next four years, and to increase its market share from 10% to 15%.
He highlighted that the urgent need of the Islamic Finance Industry is to build and enhance the professional capacity of each individual. He said that Capacity building activities not only help to improve human and institutional capacities but also enhance communication and cooperation among concerned institutions. “To achieve the desired goal, we need highly competent, motivated and involved persons with required knowledge of conventional banking and finance as well as knowledge of Islamic Shariah.
According To Faisal Afridi the key drivers for growth and competitiveness of Islamic banking industry includes Product Innovation, Development and Research. Flexible and practical application and enforcement of Shariah principles and Creation of global financial hubs and regulators’ support for Islamic finance industry. Development and adoption of simple, standard and cost effective legal frameworks for contracts associated with the new and hybrid products.
He said that Islamic banking has proved over time that it is based on firm and sound economic principles and has a good potential for become an alternative system of banking especially in view of the global financial crises. However, Attempts should be made to modify the existing structure to provide better products and quality service within the ambit of Islamic laws. To develop an economic system truly reflective of the sacred principles of Islam, all stakeholders should understand the limitations at this stage and work towards its advancement, Asserted Afridi.
For more information, contact:
Wardah Ali Gohar
Pakistan China Joint Chamber of Commerce and Industry (PCJCCI)
Mega Tower, 309 – 6th Floor,
Main Boulevard, Gulberg II,
Lahore, Punjab – Pakistan
Tel: +92-42-35777460-02, +92-42-37032203, +92-42-35874353