ISLAMIC BANKING ASSETS STAND AT RS560 BILLION, 7 PERCENT OF OVERALL BANKING INDUSTRY'S ASSETS IN PAKISTAN

INTERVIEW; RAHEEL IQBAL, CEO OF EMAAN FINANCIAL SERVICES

AMANULLAH BASHAR
(feedback@pgeconomist.com)

Dec 19 - 25, 20
11

PAGE: BEING A PREMIER ADVISORY COMPANY, HOW DOES EFS MEASURE THE STRENGTH OF SHARIAH COMPLIANT INDUSTRY, ITS FUTURE OUTLOOK AND RESPONSE OF THE MARKET IN PAKISTAN?

RAHEEL: The industry has not been here for a long time, but in view of the progress it has made in the short span of time, it is safe to say it has done a commendable job. The future looks promising as new Islamic banks are coming into existence more frequently than ever, with even the conventional banks having their own Islamic banking divisions as an integral part of them. Steps are being taken by the state bank as well to make Shariah compliant financial industry in Pakistan robust enough to offer a viable alternative to conventional banking. The response from the local market is encouraging with people pinning their hopes on the success of this industry after witnessing the failure of the conventional system.

PAGE: CAN YOU EXPLAIN THE BUSINESS ACTIVITIES OF EFS AND WHAT TYPE OF CUSTOMERS IS IT CURRENTLY DEALING WITH?

RAHEEL: Emaan Financial Services (EFS) is Pakistan's first Shariah compliant financial product distribution and advisory company. It reduces a critical gap by providing expert distribution and advisory services to financial institutions adhering to Shariah law.

Global relationships with leading asset managers allow EFS to provide clients with access to the best products with the most attractive returns without compromising the Shariah law. We are also engaged in product development activities, project/transaction advisory, international asset acquisition, developing research and training programs for Islamic finance institutions, managing social media networks driving non-traditional business traffic for financial institutions.

Our customers are those who wish to access the best products worldwide with the most attractive returns without compromising the Shariah law. Our wide distribution penetration through our client-oriented distribution network reaches the mass retail, HNI and institutional markets.

EFS is a trusted and customer-centric, one-stop financial services provider catering to the diverse needs of retail, high net, corporate and institutional customers.

PAGE: THE CONCEPT OF HALAL HAS EMERGED RAPIDLY ON THE INTERNATIONAL SCENE WHERE EVEN SOME NON-ISLAMIC COUNTRIES HAVE ALSO GRABBED A MAJOR SHARE IN THE GLOBAL HALAL MARKET. WHAT SHOULD PAKISTAN DO TO CARVE A PLACE IN THE MARKET? WHICH ARE THE POTENTIAL AREAS IN YOUR VIEW?

RAHEEL: Pakistan plays a very critical role in the development of Halal industry both in financial as well as non-financial sectors. The rapid growth of Global Halal market has brought an opportunity for Pakistan to make a foothold in the global arena. However, there needs to be coordinated strategy by both government and private sector to fully leverage this opportunity. In addition to a strategy, concrete steps have to be taken by the private sector to expand the awareness both inside the country as well as on global platform.

PAGE: HOW CAN ISLAMIC BANKS AND OTHER ISLAMIC FINANCIAL SERVICES IN PAKISTAN MAKE BETTER USE OF THE CAPITAL MARKETS? IS THERE A NEED FOR DEVELOPING A SEPARATE STOCK MARKET TO PROVIDE INVESTMENT OPPORTUNITIES FOR SHARIAH-COMPLIANT SERVICES IN THE COUNTRY?

RAHEEL: Islamic banks and other financial services forge a closer link between real economic activity that creates value and financial activity that facilitates it. Islamic finance is open to any innovations that are in congruence with its fundamentals. Islamic finance is global and offers diverse products/services, hence requires access to well established capital markets. There may not be a necessity to establish standalone capital markets at this point of time. However, innovative financial products are desperately needed to help the Islamic financial institutions manage their investments and asset deployment. Once there are enough Islamic financial products available to offer, a standalone market may be a sustainable idea.

PAGE: THERE ARE ORGANIZATIONS LIKE EOBI, STATE LIFE ETC. HAVING HUGE FUNDS AT THEIR DISPOSAL. IT IS BELIEVED THAT THESE FUNDS ARE INVESTED IN CONVENTIONAL MODES OF INVESTMENT. HOW CAN SHARIAH COMPLIANT SERVICES MAKE BETTER USE OF THESE FUNDS?

RAHEEL: First of all, there is a dire need to establish reputable Shariah compliant fund management businesses focusing on real-economic activity generation rather than merely investing in stock and capital markets. One such organization is established, then funds like EOBI and State Life can invest and help generate economic activity hence leading to economic growth in the country. EFS assists private and government sector to structure and develop such fund management solutions.

PAGE: WOULD YOU LIKE TO SHARE WITH OUR READERS INFORMATION ABOUT EFS PRODUCTS AND WHAT TYPE OF FINANCIAL SOLUTIONS YOU OFFER IN THE MARKET?

RAHEEL: EFS provides Pakistani investors with access to Shariah compliant international investment and financial products. We assist institutions in identifying and acquiring best performing financial assets from leading financial markets. In addition, we facilitate resident Pakistanis who would like to save and invest in secure and sound international financial institutions.

PAGE: WHAT IS THE CURRENT MARKET SHARE OF ISLAMIC FINANCE INDUSTRY AND ITS GROWTH RATE IN PAKISTAN?

RAHEEL: Islamic banking assets stand at Rs560 billion, constituting more than seven percent share of overall banking industry's assets in the country. With the current exponential growth rate of 36 per cent year-on-year of the Islamic finance industry, it is expected to reach one trillion rupees mark in just two years time. The market share of the industry has been increasing aggressively and is expected to reach new levels soon.

PAGE: WORKFORCE PLAYS AN IMPORTANT ROLE IN THE GROWTH OF ANY INDUSTRY. HOW MANY TRAINING CENTERS ARE HERE IN PAKISTAN TRAINING PEOPLE IN THE DIVERSIFIED SKILLS IN THE SHARIAH-COMPLIANT INDUSTRY?

RAHEEL: There are several such training centers in the country. There exists a training center of SBP only restricted to banking employees. There still exists a vast room for training programs for people who would like to join Halal financial services industry. EFS does not conduct training and awareness sessions for corporate and institutional customers.