Up to 25 percent of Pakistani banking system to be Islamic in 5 years: Bilgrami

Hasan Aziz Bilgrami, Chief Executive Officer, BankIslami said that Islamic banking sector is expected to take up 20 to 25 percent of the country's banking system over the next five years.
Addressing a meeting of Korangi Association of Trade and Industry (KATI) on Tuesday, he said that in the presence of conventional banking system running Islamic bank is a deficit task but in Islam interest is totally prohibited due to which people preferring to benefit from Islamic banking products.
He said that BankIslami is the first bank to receive the Islamic banking license under the Islamic banking policy of 2003 from State Bank of Pakistan (SBP) in March 2005. He said that BankIslami has three main sponsors including DCD group, Dubai Bank and Jahangir Siddiqui and Co, each holding 18.75 percent of the paid up capital of the bank.
He said after successfully placing of Rs 475 million in pre-IPO in Pakistan and the Gulf. BankIslami made its initial public offering of Rs 400 million on March 6,7 and 8, of this year at par (Rs 10). It was the first primary issue by a bank over last decade. On its first day of listing on the provisional counter of Karachi Stock Exchange, BIPL-PRO rose to as high as Rs 28.
He said that the initial public offering of the BankIslami received overwhelming response from general public as the application received were nine time higher than offered, fetching nearly Rs 3.5 billion, against the demand of Rs 400 million. Nearly 600,000 people applied for the shares of BankIslami.
He said that BankIslami is equipped with latest computer technology providing on line banking facility to its customers.
He said that the bank has opined three branches in Karachi and by the end of this year it will be four. The bank will soon open three more branches in Karachi beside one branch each in Lahore, Islamabad, Peshawar, Faisalabad and Quetta He said that the bank is offering Islamic Sharia compliance products, which are free from interest, and paying good return to its customers.
Former President FPCCI, S M Munir said that Islamic banking industry world-wide witnesses a phenomenal growth in the recent years. About 250 Islamic financial institutions including Islamic Banking windows of conventional banks are operating world-wide.
He said that the year 2005 has witnessed an enormous expansion of the Islamic finance industry at all levels, from retail and investment banking to capital market development and Islamic Takaful insurance. Total Assets exceeded 360 billion dollars world-wide.
He said in Pakistan Islamic banking has also witnessed unprecedented growth of 30 percent. At present there are four full fledge Islamic banks having foreign sponsorship and by the end of this year 2 to 3 more banks shall enter the industry.
He said that total investment in Islamic banking currently stands at around 1,000 million dollars and gradually increasing. Total deposit with Islamic banks in Pakistan are estimated to reach 13 billion dollars by 2014. Welcoming the guests, acting chairman KATI Masood Naqi said that as early as 1956, the first Constitution of Pakistan defines that all the law of the state will be according to injunctions of Quran and Sunnah, but the work on interest free banking was started in early 1980 when Council of Islamic Ideology presents its report on the elimination of interest, in 1985, in compliant, the commercial banks transformed their nomenclature stating all rupee saving accounts as interest free.