Islamic Banking recognised internationally, says experts

• Islamic banking volume in world banking is US$ 2 trillion and World Bank has a section on Islamic banking.
• Present Islamic banking share in Pakistan’s banking sector is about to 15% to 16% however the volume of Islamic banking could rise to 50% within 10 years.

Senior bankers and experts said that Islamic banking has been recognised not only in Muslim countries but also at international level and expressed hope that Islamic banking will replace the present conventional banking system if serious efforts are made by the Muslim countries in future.

Expressing their views at discussion on Islamic financial literacy organised by Pakistan Business Forum at Expo center, they said that Islamic banking volume in world banking is US$ 2 trillion and World Bank has a section on Islamic banking. They said that United Nations has also sought information from banking researchers with regard to Islamic banking.

They said that present Islamic banking share in Pakistan’s banking sector is about to 15%  to 16% however the volume of Islamic banking could rise to 50% within 10 years if government supports the Islamic banking system.

Chairman Bank Islami’s sharia supervisory board Mufti Irshad Ahmed Ejaz said that Islamic banking has introduced non-interest based business, trade, partnership, rent and other aspects as per sharia laws. He said Islamic banking had been initiated at sub-continent of Indo-Pakistan in 1930s but it started its working in 80s and 90s.

Mufti Irshad, who is also chairman sharia advisory board of State bank of Pakistan, said that Islamic banking sector in Pakistan is at institutional phase and need complete government supervision and continuation of reforms in such sector. He said that Islamic banking will replace the conventional banking system if serious efforts were made by the Muslim countries in next 10 to 15 years.

Responding on query about the volume of Islamic banking in Pakistani banking system, he said that Islamic banking volume is about to 15 to 16 percent in present banking system however SBP was making effort for promoting the Islamic banking system. He said that government and public sector institutions, traders will have to come forward to promote the Islamic banking as Islamic banking could not be succeeded until its share is increased more than 50 percent in present banking system. He called for legislation on Islamic banking and institutional support by the government.

Meezan Bank’s executive vice president and head of sharia audit and advisory Farhanul Haq Usmani said that Islamic banking concept has now been acceptable in Muslim countries and societies and banking could be made through non-interest basis.

AAOIFI general secretary Umar Mustafa Ansari said that as many as 23 countries has adopted the standard of his organization with regard to Islamic financing and urged the need of highlighting the concept of Islamic banking in Muslim countries. He said that Islamic banking volume has increased upto US$ 2 trillion and now Muslim countries have option of non-interest based banking.

He said that Islamic banking system could replace the interest based banking system as World bank has introduced a separate section of Islamic banking while IMF was reviewing the Islamic banking system. Jamat-e-Islami Sindh Amir Mohammad Hussain Mehanti also spoke on the occasion.