Islamic banking in Pakistan has shown a tremendous growth and keeping in view the expectations of the people and peculiar nature of Shariah-compliant transactions, there is a dire need to develop new financial risk management techniques and methodologies.
This was stated by Pervez Said, Director, Islamic Banking Department, State Bank of Pakistan in his opening remarks, while addressing one-day seminar on Risk Management Framework for Islamic Banking Institutions organised by SBP at its Learning Resource Centre, here on Monday. He informed the participants that SBP had developed a curriculum for Islamic banking courses and sent to Higher Education Commission.
The risk management guidelines are in addition to various risks management guidelines issued by the State Bank from time-to-time and IBIs are required to comply with both the sets of guidelines, Pervez added. The seminar, in which senior officers from SBP and Islamic banking industry participated, was held to discuss Risk Management Framework rolled out by the State Bank recently on the basis of Risk Management Standard issued by the Islamic Financial Services Board.
The Risk Management Guidelines for Islamic Banking Institutions (IBIs) have been developed by tailoring the IFSB guiding principles on Risk Management to Pakistan's market conditions. Among others, who spoke at the seminar included Javaid Hussain Siddiqui of Bank Alfalah and Mujeeb Beig of Dawood Islamic Bank besides Mahmood Shafqat of Islamic Banking Department and Rizwan Chughtai of Banking Surveillance Department of the State Bank.
They highlighted the areas where Islamic banks could face risks, in conjunctions with Basel II regime, and discussed the risk mitigation techniques. The participants appreciated SBP's efforts in conducting such seminars and urged the central bank to hold seminars/workshops on other important topics.