ISLAMIC BANKS NEED GRADUATES IN ISLAMIC BANKING
Business schools should respond to market demand
Sep 11 - Sep 17, 2006
The concept of Islamic Banking is gaining momentum especially in the Muslim world where more than $250billion is invested in Shariah compliant mode of financing.
A tremendous growth of Islamic banking seems to have offered a win situation both for investors from the oil rich Middle East in the wake of abnormal increase in international oil prices and career seekers from Non-Arab Muslim countries.
Pakistan is also not lagging behind in promoting the concept of Islamic Banking especially with the support of the central bank which is issuing new banking incenses exclusively for Islamic Banks.
A survey conducted by Al-Huda Center of Islamic Banking and Islamic Economics regarding the services, operations, facilities, Major products and future outlook of the Islamic bank in Pakistan.
The purpose of this exercise was to have a productive feed back, which could be helpful for the progress of Islamic Banking market in Pakistan.
The survey was conducted with around 611 participants from all over the country.
The first question was related to the reason for choice or selection of Islamic Bank for financing solutions.
In the reply of question 33.4 percent were of the view that the main reason for choosing Islamic banking was that Islamic banks offer better services as compared to the conventional banks. 63.2 percent attributed to their belief to get rid of what they called the curse of Riba (interest) while 3 percent opted for Islamic banking due to good profit earnings.
On a question that would they like to go back to interest based banking system? The answer of 60 percent was they would never like to go back while 33.3 percent simply said 'No' and 6 percent opted for a 'yes'.
Answering to another question about technological facilities such as ATM, Online Banking, E-Banking, over 73 percent were of the view that they were enjoying these latest facilities in their branches of Islamic banks, 13.4 percent replied in negative while 13 percent said 'a little b it'.
Another question was asked about the operating system of Islamic Banks, 70 percent of the participant of the survey said it is very good, 30 percent said just good and no one said it is not good.
When they were asked that whether they have Islamic Banking branch located near to them 66.7 percent replied in affirmation, 33.3 percent said no.
Replying to yet another question regarding motivation to other friends/family members towards the Islamic Banking, 94 percent said yes they would like to suggest them to go for an Islamic Bank while 6 percent said no.
About the services of the Islamic Banks, 43 percent said they are availing current account services, 20 percent had a choice for Ijra, 20 percent Musharika, 20 percent Murabaha and 6.7 percent mentioned about Modaraba.
Zubair Mughal, Director Al-Huda, speaking on the occasion observed that outcome of the survey shows that at one end the customers of Islamic banks are quiet satisfied with the current services provided by these banks. However they are also attaching better expectations.
The pace of this industry has got at this stage can be marked as good. He said that we have a well-established Research and Development department in Al-Huda, which is working efficiently for the growth of Islamic Banking. He paid special gratitude to Islamic Banks for the warm cooperation for conducting this research process.
Muzhar Ali Bukhari, Head of Islamic Banking Prime Bank remarked that Al-Huda, CIBE Contribution should be prized which they are rendering for the expansion of Islamic banking industry in Pakistan. Speaking on the occasion Muhammad Asad Head of the Bank of Khyber Islamic banking division said that this type of survey could be helpful for assessing the industry in a true spirit and in accordance to the wishes of the customers.
Actually, the Islamic banking relies on the concept of depositors and borrowers working together as partners, sharing in profits or losses, while the bank acts as an intermediary and charges a fee for managing the transaction.
Under the Islamic norms and values, fixed interest returns offered by the conventional banks has been declared as Haraam, (illegitimate). The Shariah based system appreciates the concept of profit and loss being shared by depositors and borrowers.
The concept of Islamic banking forbids investing in areas considered vices by Islam, such as gambling, alcohol, pornography or in the commercial organizations that are exposed to large and recurring interest payments.
Currently, Pakistani banks are gearing up to offer Islamic banking services in recognition of those who are eager to turn to Islamic banking from conventional banking. However, this fast emerging area calls for training of the fresh graduates who could take over the growing responsibilities in the financial sector especially in the Muslim World. So far our business schools financial institutions are producing graduates who are accustomed with the convention financial system and the responsibility of producing man power capable of handling the growing needs of the Islamic Banking seems to have been left for religious institutions. It is however believed that our universities would be taking care and would include the subject of Islamic Banking while producing crop of fresh graduates.