Finance Minister Senator Ishaq Dar said that the government is taking structured policy actions to promote Islamic Banking in Pakistan. In this connection, the finance ministry has issued notifications constituting four sub-committees for promotion and facilitation of Islamic Banking in the country. Terms of Reference of the sub committees were also approved and issued.
The sub-committee on legal & regulatory framework will be chaired by the Governor State Bank of Pakistan. It has representation of various commercial Banks, Shariah Scholars, Ministries of Law and Finance. TORs of the Committee include Fast track adoption of Accounting and Auditing Organisation for Islamic Financial Institutions & Islamic Financial Services Board standards for Islamic Financial Institutions (IFIs), encourage conventional banks with large Islamic banking operations to convert into full-fledged Islamic banks or establish Islamic banking subsidiaries and conversion of domestic debt into Shariah compliant financing.
The sub-committee on taxation will be chaired by the Chairman Federal Board of Revenue. It has representation of the Banks, Finance Division, Shariah Scholars and Heads of Revenue Authorities of all Provinces. The Committee will advise FBR to provide tax neutrality for Islamic Financial Institutions and review tax related matters of Islamic banking subsidiaries of conventional banks and will make it a competitive business model.
The sub-committee on capital market will be chaired by the Chairman, Securities & Exchange Commission of Pakistan. It has representation of FPCCI, Banks, Shariah Scholar, Pakistan Stock Exchange and Finance Division. The committee will harmonise terms and conditions of Shariah compliant instruments issued by NBFC, Notified Entities and Modarabas, Issuance of retail Sukuk, introduce innovative financial products like Real Estate Investment Trust, securitization etc on Islamic basis. Further, SBP & SECP will develop framework for Islamic Banking Institutions to enter into private equity business.
The sub-committee on awareness, training and capacity building will be chaired by the Deputy Governor, SBP who is also the convenor of all the sub-committees. It has representation of National Institute of Banking and Finance (NIBAF), SECP, Banks, IBA, LUMS, IMS and Finance Division. This committee will promote culture of Islamic finance research and development, set up multi-stakeholders' forum-Islamic Finance Association, introduce educational reforms w.r.t Islamic Finance and Training & capacity building of designated focal persons.-PR
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