By Staff Reporter
ISLAMABAD: Federal Finance Minister Ishaq Dar on Monday said that Pakistan has a comprehensive plan in place to expand Islamic finance, and the current financial inclusion strategy can also cover all the components required to create Islamic financing.
He was speaking at the inaugural Islamic Capital Markets (ICM) Conference as chief guest, which was hosted by the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI) and the Securities and Exchange Commission of Pakistan (SECP) jointly in Islamabad.
He also highlighted that Pakistan is among the few nations with a well-developed regulatory framework for microfinance organizations. He applauded the State Bank of Pakistan (SBP) and SECP for their influential role in this regard.
Finance Minister added that major financial markets worldwide had shown evidence that Islamic finance has already been mainstreamed, equal to the global financial system and that it has the potential to tackle the challenges to boost shared prosperity and end extreme poverty.
SECP Chairman Akif Saeed also spoke at the conference. He said, “They aim to boost the Islamic capital market in the coming two years”. Akif told the audience that many financial institutions and companies had contacted SECP to launch Islamic products and services.
He noted that after the Federal Shariah Court’s decision to eliminate Riba, many vital steps were taken to boost the Islamic financial system in Pakistan.
He explained to the audience that SECP is amending the Modarba Ordinance to undertake comprehensive reforms. He continued that SECP has developed a specific window for promoting Islamic finance products. “SECP also launched its fourth cohort of its Regulatory Sandbox, and we have kept a separate window for Islamic products.” He claimed that continued government assistance is still required to grow the Islamic capital market.
In his statement, Jameel Ahmed, governor of the SBP, stated, “We are dedicated to transforming the financial industry into a system that complies with shariah. To accomplish the agreed-upon objectives for the transition to an Islamic economic system, SECP and SBP are acting as members of the steering committee of the federal government.
Governor SBP added that the development and deepening of Islamic capital markets are imperative to mobilize savings, support economic growth, provide diverse funding resources to economic agents and improve resource allocation.
He said that the critical impediments to the growth of Islamic capital markets include gaps in legal, regulatory, and institutional frameworks, a lack of diversity in Islamic capital markets investors and instruments, and a lack of efficient ways for price formation and discovery.
