The NWFP legislature on Tuesday passed the Bank of Khyber (Amendment) Bill, 2009 re-allowing the bank to promote Islamic banking in addition to conventional banking. The purpose of the bill was to further amend the clause (f) of the Preamble of the Bank of Khyber Act, 1991 (NWFP Act No XIV of 1991).
The previous government of the religio-political alliance, Muttahida Majlis-i-Amal (MMA) amended the preamble of act to develop and promote Islamic modes of financing with a vision to convert the bank into a full-fledge Islamic bank. NWFP Finance Minister Mohammad Hamayun Khan presented the bill for consideration and adoption from the house. Earlier, the move of created a furore not only amongst the members of the provincial assembly, but also outside.
The parliamentary groups of the religio-JUI-F and conservative PML-N have announced opposition to the bill. But, interestingly, on the d-day of the passage of the bill, two parliamentary groups of the opposition staged walkout over rejection of a privilege motion by Hafiz Akhtar Ali.
But, members of the PML-N did not join the walkout, led the JUI-F. However, it was the parliamentarians of the enlightened moderate PML-Q, who supported the former. The boycott prompted by the bulldozing of the privilege motion might have hit the feelings of the supporters of the JUI-F. Mufti Kifayatullah, a soft spoken JUI-F legislator from Mansehra, who was making hue and cry against the amendment and re-allowing of conventional banking by the bank, also preferred boycott to pave way for the easy adoption of the bill by the house.
Mufti Kifayat had earlier on the floor of the assembly attributed the amendments in the Bank of Khyber Act and its re-allowing to the invitation of the wrath of Allah Almighty. Earlier, Speaker Kiramatullah Khan called the name of Mufti Kifyatullah for moving his proposed amendments. But, he was on boycott of the house proceedings, which paved the way for passage of the bill from the assembly without any major opposition.
Later, Finance Minister Mohammad Hamayun Khan expressed thanks to the house for the passage of the bill and dispelled the impression, which, he said, was created by certain quarters that the provincial government was bent upon to abolish the Islamic banking system.
The Bank of Khyber has a total of 34 branches with 16 Islamic banking branches. The finance minister, who is also responsible for looking after the affairs of bank told, the house that the assets of Islamic branches and conventional branches were Rs 15 billion and Rs 20 billion respectively. The loans disbursed by Islamic branches amounted to rupees two billion, while the same at conventional branches stood at Rs 13 billion.
During last calendar year, the Islamic branches had earned a profit of Rs 170 million, while the profit of conventional branches during the same period remained at Rs 600 million, he said.
Furthermore, he said that the State Bank of Pakistan (SBP), the regulator of the banking industry, had set up specific criteria under which the banks were required to reach their paid-up capital to rupees six billion by the end of 2009, Rs 10 billion by 2010 and Rs 15 billion by 2013. The achievement of these targets, the Finance Minister said, was very difficult, while in the conventional banking system, the bank was available with a number of parties to achieve it.
"The government is not abolishing the Islamic banking and the propaganda campaign launched was totally wrong and unjustified," concluded the Finance Minister. Later, the house also passed Islamic College Bill, 2009 to upgrade the historical educational institutions to the level of university after adopting some minor amendments proposed by Abdul Akbar Khan of PPP, Israrullah Khan Gandapur (PPP-Sherpao) and Saqibullah Khan Chamkani of ANP. The chair later adjourned the proceedings of the house till Wednesday.
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