Pakistan Mercantile Exchange Limited (PMEX) has achieved yet another breakthrough by facilitating the country's first electronic Murabaha transaction at its Shariah Compliant Trading Platform (SCTP), which in essence will pave the way for an Islamic Money Market. The country's Islamic Financial sector is growing at a rapid pace of over 20% over the last 5 years with an asset & deposit base of over Rs. 2 Trillion & Rs. 1.7 Trillion respectively.
PMEX SCTP is a revolutionary and landmark achievement in the history of Pakistan, which has the potential of bringing Islamic banks at par with their conventional counterparts in terms of managing excess liquidity in a convenient, transparent and Shariah-compliant manner. Islamic Financial Institution's (IFI's) can utilize this facility to deploy liquidity to all potential segments, including the government. The Exchange has ensured, in consultation with its Sharia Advisor that the product is completely Shariah-compliant. The product has been vetted by Sharia Board of State Bank of Pakistan (SBP) Chaired by Respected Justice Muhammad Taqi Usmani (R), Securities & Exchange Commission of Pakistan (SECP) and Islamic Banking Sub Committee of Pakistan Banks' Association.
SBP approved the pilot phase of electronic Commodity Murabaha at PMEX SCTP for a period of four months. PMEX successfully completed the pilot phase on March 31, 2018. During this period, PMEX invited Financial Institutions and provided them an insight of the trading mechanism and also facilitated them in concluding the transactions under the guidance of Shariah advisor.
The Exchange is grateful to its Board of Directors, apex regulators (both SECP and SBP) and Shariah Scholars for their guidance and financial industry players & private sector institutions for their active participation. The Exchange is confident that in coming times this landmark initiative would strengthen the Islamic financial sector and eventually provide the ground on which the Islamic banking industry will flourish.