ISLAMIC BANKING EVOLVING GLOBALLY
Standard Chartered Bank became the first international bank to receive an Islamic Banking branch licence from SBP and the first international bank to start offering Islamic Banking products
July 31 - Aug 06, 2006
Islamic Banking is evolving globally as the leading growth sector in the field of emerging finance. The future of the Islamic Banking industry in Pakistan is extremely promising as the State Bank of Pakistan through its proactive regulatory and promotional policies is creating a conducive environment for market players. There is enormous potential in this area and as such, we must focus our energies and exploit this opportunity to its fullest.
Keeping this in mind and the requirements of our customers who wanted Shariah-compliant financial products, Standard Chartered Bank in Pakistan became the first international bank to receive an Islamic Banking branch licence from the State Bank of Pakistan and the first international bank to start offering Islamic Banking products to our customer base through a dedicated Islamic Banking Branch. Our offering at present includes: Islamic Current Accounts, Islamic Savings Account, Islamic Term Account, Islamic Auto Finance, Islamic Home Financing, Short-term Murabaha Financing and Islamic Import Financing. Standard Chartered Bank is the first bank in Pakistan to launch Musharaka-based Auto Finance product.
Our product offering has been developed through extensive research and guidance from an independent Shariah Supervisory Committee and our dedicated Islamic Banking team. We are focusing our efforts to ensure that all our Islamic products comply with Shariah principles. The bank takes guidance from renowned scholars and all its products are supervised and reviewed by an independent Shariah Supervisory Committee. The current members of Standard Chartered's Shariah Supervisory Committee are Dr. Abdul Sattar Abu Ghuddah based in Jeddah and Sheikh Nizam Yaquby from Bahrain. Both Dr. Abu Ghuddah and Sheikh Yaquby are respected scholars in the field of Islamic finance and investment.
Islamic Home Finance: Our Islamic Home Finance product is structured under the concept of Diminishing Musharaka. Under this concept, the customer and the bank enter into participation where the bank may provide a larger share of the purchase price of the property. As part of the agreement the bank will allow usage of the property to the customer over a period and the customer makes regular payments or rent for the use of property. The customer will make regular scheduled investments in the participation to increase its share in the property. Thus with each payment customer ownership in the property grows. Once the customer has purchased the complete share, he becomes free and clear title owner of the property.
Islamic Auto Finance: MusharaCar is our innovative Islamic Auto Finance product which is being offered under the concept of Diminishing Musharaka. Under this concept, the bank and the customer becomes a partner in the car. The customer purchases the bank's share over the period of the financing and also pays rent for the use of bank's share. Once the customer has purchased the complete share, he becomes free and clear title owner of the car.
Islamic Savings & Term Account: Our Islamic Savings and Term Account Products are based on Islamic principle of Mudarba. These products work on profit sharing basis in compliance with Shariah principles. These products facilitate non-interest bearing deposits for customers and with the help of established Shariah principles it is ensured that the funds deposited in the account are deployed in Shariah-compliant venues.
Islamic Banking Branches: Our Islamic Banking Branch network is expanding rapidly across Pakistan. Currently we have three dedicated Islamic branches located at prime locations at Metropole & Muhammad Ali Society in Karachi and at main Boulevard, Gulberg, Lahore.
We see a promising future for the Islamic Banking industry in Pakistan and are confident that we will keep on bringing in innovative Shariah-compliant products for our valued customers.
Standard Chartered has also started Islamic Banking in UAE, Bangladesh and has a very well established setup in Malaysia, which makes Standard Chartered Bank a leading provider of Islamic Banking services at international level.