'Islamic banking constitutes about 7.3 percent of overall system'

Muhammad Kamran Shehzad, Deputy Governor, State Bank of Pakistan on Friday said the Islamic banking industry at present constitutes about 7.3 percent of the overall banking system in Pakistan. He said this while addressing the closing ceremony of a five-day Training Programme on Islamic Banking, which was jointly organised by SBP and Islamic Research and Training Institute (IRTI), here.
He said the Islamic banking industry since its re-launch in 2001 has gradually increased its share in the market, adding that there are 5 full-fledged Islamic banks and 12 conventional banks having Islamic banking branches with a network over 840 branches in more than 70 districts across the country.
He noted that the Islamic banking industry has maintained strong growth momentum with over 30 percent average annual growth during the last 6-7 years. The Deputy Governor observed that the growth trend in Islamic banking industry is likely to gather further momentum with increasing awareness level and expansion of Islamic banking network in second and third tier cities of the country.
Shehzad said that the strong growth momentum witnessed by the industry in Pakistan could be attributed, among others, to the key role played by the SBP in providing an enabling environment. "The SBP has been at the forefront of almost all the initiatives that have been taken to help develop and promote the industry," he added. Besides developing a supportive regulatory and supervisory framework, the SBP is actively engaged in promotion and training and capacity building of the Islamic banking industry, he said.
The Deputy Governor said that a number of initiatives have been taken to build the industry's HR capacity and skills mix. The financial and technical support of reputed national and international institution like IRTI, Islamic Financial Services Board (IFSB) are also being mobilised to organise training and capacity building programs, he said.
Our membership and active engagement with IFSB, Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) and the International Islamic Financial Market (IIFM) also helps us in leveraging their resources for our awareness and capacity building initiatives', he added. "We believe that these collaborative efforts would translate into significant improvement in the industry's HR capacity and public awareness levels about Islamic banking in the near future. Similarly, we are actively engaged with the industry to diversify the product mix and develop cost effective liquidity management solutions," he said.
Kamran Shehzad said that IRTI as a research and training arm of the Islamic Development Bank Group has played a key role in development of Islamic Financial Industry in the member countries through its research & development and capacity building initiatives.-PR