Finance Ministry to set up separate division for Islamic banking: Miftah

Advisor to the Prime Minister on Finance and Economic Affairs Dr Miftah Ismail Monday said the Ministry of Finance would soon set up a separate division for increased support to the fast growing Islamic banking.

A meeting of the Committee for Implementation of The Recommendations of Steering Committee for Promotion of Islamic Banking would also be convened soon, Dr Miftah said while speaking here at a two-day World Islamic Finance Forum (WIFF-2018).

The international forum has been organized by Institute of Business Administration's Centre for Excellence in Islamic Finance (CIEF) in collaboration with key partners with the theme "Expanding the Footprint of Islamic Finance: Innovation, Fintech and Regulations."

The advisor said the government would soon launch Rs 100 million Sukuk bonds for Islamic banking industry to strengthen its liquidity position in pursuance of its mission of fast growth of Islamic financing in the country.

Highlighting the performance of PML-N government, Dr Miftah said, "We are set to achieve 6 per cent gross domestic product (GDP) growth rate, the highest rate during the last decade."

He hoped that the 6% GDP growth rate would help create a lot of job opportunities. The country had the potential to even achieve 8 to 10 per cent growth rate. It had huge coal deposits in Tharparker with estimated market value of Rs 9 trillion. There was a big stock of copper and many other natural resources in Balochistan, which should be utilized to the optimum level, he added.

He said the government had removed the basic bottlenecks in getting higher economic growth, including energy shortage, law and order, and red tape for the businessmen and industrialists.

He underlined the need for further simplification of procedure of doing business and reducing the number of taxes, saying the government was moving forward to achieve those targets.

He said, "I am trying to resolve the business community's problems." The next budget would aim at maximizing the economic growth instead of maximizing revenue, he added.

Miftah said the government was going to announce an amnesty scheme during the current month. However, there would be certain checks to stop its misuse, he added.

He said in the coming budget, the rate of tax on individual’s income would be reduced to support the common man.

Chairman, Sharia Board of The Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) Shaikh Muhammad Taqi Usmani said the people of Pakistan origin, who were holding key positions in Islamic banking industry around the world, were making contribution in developing regulatory framework and above all developing products that were meeting the emerging needs of trade and industry.

He urged the government to take concrete steps for making the economy riba (interest) free in absolute terms.

Taqi Usmani pointed out that Islamic financial institutions had excess liquidity and the government should work on creating avenues for its investment.

"I would suggest the ruling party to include in its election manifesto that riba would be eradicated totally from economy at the earliest," he said.

Chairman AAOIFI Board of Trustees, Bahrain Shaikh Ebrahim Bin Khalifa Al Khalifa, who was the chief guest, said, "It is heartening to note that Pakistan is striving to become another hub of Islamic finance. It has all the basic ingredients -- a population of 200 million predominantly Muslims, a robust banking and finance sector, vibrant agriculture, industrial and services sectors."

The apex regulators - State Bank of Pakistan (SBP) and Securities and Exchange Commission of Pakistan, he said, were playing a proactive role. The progress made over the last decade was encouraging, which guaranteed that achieving the target would not be difficult, he added.

Meezan Bank President Irfan Siddiqui requested the federal government to set a target to acquire at least 25 per cent of the local funding through Islamic banking as Islamic financial institutions had excess liquidity and limited avenues for investment.

SBP deputy governors Jameel Ahmad and Shamsul Hasan spoke of the central bank's initiatives to promote Islamic banking in the country. CEIF- IBA Chairman and former SBP governor Dr Ishrat Husain deliberated on Islamic banking and its future potential. CEIF- IBA Director Ahmed Ali Siddiqui, welcoming the delegates, said the center had emerged as a regional platform for excellence in Islamic finance.

He said focus areas of CEIF included development of Islamic finance professionals and new human resources talent pool through industry linkages and international collaborations. Panel discussions were also held, which were attended by senior bankers – APP