Nov 8 - 14, 20

With a view to promoting Islamic banking and to highlight challenges posed to it, Alhuda Centre of Islamic Banking and Economics organised the 4th International conference on Islamic banking and Takaful in Lahore.

Delegates from 24 countries including USA, Malaysia, Indonesia, South Africa, Mauritius and Kenya participated in the moot and presented their research papers as well as presentations on Islamic banking and finance.

In this moot, first day covered the topics of Islamic banking and its Shariah issues, Shariah methodology, Takaful, Islamic brokerage, Halal industry and Islamic funds. On 2nd and third day, Islamic Microfinance and Shariah standards were discussed.

Among the speakers included Yaseen Anwar, State Bank of Pakistan Deputy Governor, Muhammad Zubair Mughal, CEO AlHuda Centre of Islamic Banking and Economics, Pervez Said, CEO of Dawood Islamic Bank, Salim Ullah, Head of Islamic Banking, State Bank of Pakistan, Justice Khalil-ur-Rehman, P. Ahmed, CEO of PakQatar Family Takaful, Alberto (CEO of Shirkah Finance, Switzerland, Professor Khawajah Amjed Saeed, Principal of Haley College of Banking and Finance, Prof. Nadeem Feroz, The University of Montclair, USA, Dr. Muhammad Qaseem, Shariah Advisor of Dubai Islamic Bank, Qazi Abdul Samad, Shariah Advisor of Bank of Khyber, Mufti Ehsan Waquar, Shariah Advisor of UBL, Captain Jamil Ahmed, CEO of Universally Insurance, Azeem Pirani, Regional Head of FWU AG Switzerland, Asim Khan, Executive Director of Dar Al Istithmar, UK, Shahid Muhammad, CEO of Naymet Islamic Microfinance, Dr. Amjad Saqib, Executive Director of Akhuwat, Dr. Rafick Nabi Mohamod, Founder of Albarakah Multipurpose Cooperative Society, Mauritius, Khalid Waheed, CEO of Hum Securities, Nasre Nasser Eddien, Path Solutions, Kuwait, and Muhammad Aslam, Head of Islamic Banking, HBL.

Speaking at the moot, Yaseen Anwar said that there exists vast opportunity for Islamic banks, which have surplus funds, to fill the credit gap in private sector, created by conventional banks that are investing in treasury bills.

"At present the Islamic banking is facing two challenges that are holding its growth; there is a need of capacity building of Islamic banking institutions and promotion of awareness of Islamic banking products among the masses. However, opportunities are there for Islamic banks to increase its market share by focusing on SMEs, microfinance and housing finance," he added.

According to him, Islamic banking is rapidly taking its roots all over the world. "It's noteworthy that the assets of Islamic banking will exceed 1.3 trillion dollars soon and there are more than 1100 Islamic financial institutions operating all over the world," he added.

Yaseen Anwar emphasised upon the growth and development of Islamic microfinance and housing sector in Pakistan. He said the year on year deposit growth has also been an impressive 39-per cent and the share of assets and deposits of Islamic banking have increased to 6.1 and 6.4 per cent, respectively. "In addition, Islamic banking branch network has increased to 667 branches and sub-braches now spread across the entire country," he observed.

He said the recent growth coupled with a number of dedicated Islamic academic, legal, regulatory and supervisory institutions provide a solid platform for future growth and development of Islamic finance industry. In Pakistan, the Islamic banking was re-launched by the central bank in 2001 as an alternate and parallel system to provide an option to public to enable them to choose the products that best serves their needs. A comprehensive legal, regulatory and Shariah compliant framework was put in place before launching the initiative. He said the initiative has been a big success; the Islamic banking industry had grown manifold since 2001 and at present it has reached total assets worth Rs411 billion up to June 2010, showing an impressive year on year growth of 31 per cent. "Due to continuous growth in its deposits, the Islamic banks have surplus funds and have an opportunity to diversify their products mix by focusing on areas that are un-served and under-served, including tapping un-banked population, agriculture sector, SMEs and housing finance," he said.

He further said there were also advantages available for Islamic banks to offer financing of Musharaka and Modaraba basis, whose share of total financing is negligible. In order to steer the Islamic banking industry towards Musharaka and Modaraba financing, a task force on Musharaka and Modaraba financing has been established at SBP. Its key objectives are to review constraints faced in Musharaka and Modaraba financing, suggest recommendations for removing identified constraints and initiate Musharaka and Modaraba financing on a larger scale in Pakistan.

Muhammad Zubair Mughal, CEO AlHuda Centre of Islamic Banking and Economics, said the purpose of organising this conference is to highlight the image of Islamic banking and finance all over the world so that Islamic banking of Pakistan could convey its Shariah standardisation all over the world.