Advocates of Islamic banking in Pakistan have said that the banks are forced to remain within the regulatory framework of conventional banking and, therefore, to expect from them to come up with innovatives and purely Islamic products is a bit too much and too early.
Speaking at press briefing at a local hotel on Tuesday, Dr Muhammad M. Awan, a multi-disciplinary scholar of Islamic Jurisprudence and exponent of Islamic banking, said that the central bank here has not created a separate regulatory system to encourage Islamic banking in Pakistan. "So, the banks are forced to remain locked up and confined to conventional banking, leaving little room for Islamic banking to expand."
He said he knew that banking across the globe has to conform to standard banking system for all banks in the world. The same is applicable to banking in Pakistan. But, for Islamic banking, new set of rules and new products that should be purely riba-free (free from interest) would be needed if the intention is to have a system that should run parallel to conventional banking.
The central bank, as a regulatory body, safeguards the interests of both the banks and their customers. To encourage Islamic banking, the central bank has to ensure the same kind of protection to banks and their customers.
He said that the concept of Islamic banking is fast becoming popular and in not distant future there would be more than 1000 financial institutions dealing with Islamic products and offering services that conform to the requirements of shariah.
He said that to meet this need the 'International Centre for Education in Islamic Finance' (Inceif) has set up aggressive professional training programme. By next year, there would be trained manpower coming out of Inceif.
He said that the load of Islamic banking and the system of handling new products would need trained human resources. "Inceif is there to meet that need," he said.
Introducing Inceif, Awan said, "Inceif has opened its doors to finance professionals from across the globe to meet the growing need for highly educated finance professionals who can deal with Shari'ah-compliant products and services being offered by international financial institutions today. It would train professionals to meet the need of their clients."
This institution has the backing of Islamic Development bank (IDB) and is seen as a premier global institution serving as a nucleus for collaboration with other Islamic financial education centres. This institution has also undertaken the task of developing and elevating modern Islamic financial knowledge. The certified Islamic finance professional (CIFP) programme combines specialised academic theories with practical industry experience, creating a holistic and comprehensive syllabus for future knowledge leaders in Islamic finance.
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