'20 percent of banking assets to come under Islamic banking by 2010'

State Bank of Pakistan Executive Director Azhar Kureshi has assessed that share of Islamic banking was 3.4 percent at present but he was confident that about 15 to 20 percent of banking assets will come under Islamic banking by 2010.
Islamic Banking is growing gradually but it owns only 3.4 percent share of banking industry that means it did not make the headway as it should have, due to various factors ie lack of public awareness, limited products and inability to meet with all the requirements of corporate loans and services.
During decade of eighties when a rigid system was introduced with a revolutionary zeal rather than taking an evolutionary path, the rigid system was not compatible with dynamics of the banking market and, therefore, could not make any headway. It is moving ahead slowly to become more easy and practical choice over conventional banking.
This was the consensus view of bankers, scholars and businessmen at a seminar organised by Primedia Inc on "Islamic Banking and Investment - progress and potential" held at Federation of Pakistan Chambers of Commerce and Industry (FPCCI) House.
Chairing the seminar, Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Vice Chairman Zubair Tufail said that due to the policies of State Bank of Pakistan, Islamic banking was making progress but the business community was expecting towards more incentives and products, and hoped that in coming five years Islamic banking sector would secure its due share.
Enlightening the audience about the bank's policies, SBP Executive Director Azhar Kureshi said that being the regulatory body, State Bank was endeavouring hard towards the progress of Islamic banking in the country. The State Bank of Pakistan (SBP) was aware of the business community's problems and was trying to reduce them enabling the community to opt for Islamic banking, he added.
To make the Islamic-banking sector more functional, the SBP was issuing license separate from conventional banking in different ways, he said. He said: "We are way behind in Islamic banking from many countries but their Islamic banking age is 40 to 50 years where Islamic banking in Pakistan has not completed even 10 years."
The State Bank of Pakistan (SBP) official recalled earlier setbacks in Islamic banking during decade of eighties when a rigid system was introduced with a revolutionary zeal rather than taking an evolutionary path. The rigid system was not compatible with dynamics of the banking market and, therefore, could not make any headway.
Now that there is a regulatory framework in place and banks are offering Islamic banking as a viable alternative and more and more people are participating in the system.-PR