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Govt must bend rules for promotion of Islamic Finance in respect of public perception

Interview with Mr Pervaiz Ahmed – An Islamic Finance professional

Profile

Pervaiz Ahmed is an Islamic Finance professional. He has over 28 years of leadership experience in local, multinational and government organizations. He is the founding Chief Executive Officer (CEO) of Pak-Qatar Family Takaful. Currently, he is associated with The Indus Hospital as Executive Director and with Al-Meezan Investment management as Independent Director.
PAGE:YOUR VIEWS ON THE GROWTH OF ISLAMIC FINANCE IN PAKISTAN:

PERVAIZ AHMED: In Pakistan, public by and large does not want to deal with products with Riba and its associated products. Hence, there is a genuine need for Islamic financial products. Over last 10 years, Islamic finance has gone through various stages of infancy, turbulence, uncertainty and now it is in the age of certainty. This is with respect to public perception. However, as far as industry issues like liquidity management, coming up with new products and services are concerned, there are still a lot of uncertainties around.

PAGE:WHAT IS THE CURRENT STATE OF ISLAMIC FINANCE IN PAKISTAN?

PERVAIZ AHMED: This is high time for the government to play its role. Most of the Islamic financial institutions are suffering due to higher liquidity resulting from non-availability of government backed instruments. During last few years,government has not issued any major Sukuks, which is putting Islamic Financial Industry (IFI) at disadvantageous position as compared to their conventional financial partners. Further, government should be coming up with a policy framework to Islamize the whole economy not just the banking. State Bank of Pakistan (SBP) should be given target/deadline to do away with all products and instruments which deal in Riba and there should not be any non-Islamic financial institution operating in the country.

PAGE: HOW WOULD YOU COMMENT ON SHARIAH RULING?

PERVAIZ AHMED: Alhamdulillah during last 10 years, both IFI and Shariah scholars have made significant progress to understand each others’ requirements and currently we see a lot of harmony and consistency in Shariah rulings on various products and services. However, due to some of the practices of IFIs, public at large does not have good perception and many still believe that it is just an eye-wash.

PAGE: WHAT HAS BEEN DONE BY THE GOVERNMENT REGARDING SHARIAH COMPLIANCE AND ISLAMIC FINANCE?

PERVAIZ AHMED: During last 4 to 5 years, government has not done enough to promote Islamic finance. They have taken some steps in bits and pieces but didn’t adopt any holistic approach to promote Islamic finance.

PAGE:WHAT ARE THE PROSPECTS FOR ISLAMIC FINANCE IN THE DAYS TO COME?

PERVAIZ AHMED: If government continues to play an impartial role and if does not support this segment, it will negatively impact the whole industry. On the other hand, IFIs do not seem to have vision and courage to drive the market by introducing innovative products, services and distribution channels. In immediate future, Islamic finance will remain in inertia.

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