December 09, 2024 (MLN): The Securities and Exchange Commission of Pakistan (SECP) has approved a comprehensive Strategic Action Plan for 2024-2026, aimed at advancing Islamic finance in non-bank sectors.
This initiative aligns with the 26th Constitutional Amendment, which mandates the elimination of Riba by January 1, 2028, as per the press release by the Commision.
The newly-approved plan establishes a clear roadmap to enable Islamic finance across all regulated sectors under the purview of SECP by December 2026.
Following this, a detailed strategy will be developed to guide the transition of conventional financial institutions into fully Islamic financial institutions while ensuring minimal disruptions in the financial ecosystem.
The plan focuses on four key verticals:
(i) Growth Acceleration, increasing Islamic finance's share in regulated sectors
(ii) Achieving Standardization, promoting consistency and harmony in Islamic financial practices
(iii) Improved Quality, enhancing the overall performance and efficiency of Islamic financial institutions
(iv) Strengthening Legal Framework, providing a robust foundation for Islamic finance to flourish.
These verticals are expected to pave the way for increased Islamic financial institutions, assets, and services, particularly within the non-bank financial sectors.
The SECP has worked closely with Capital Market Infrastructure Institutions (CMIIs) to design and validate the plan.
The press release further noted that the SECP seeks to leverage the expertise of CMIIs to establish a supportive regulatory framework for the growth of Islamic finance.
The SECP emphasized its commitment to supporting Islamic finance while ensuring adherence to Pakistan’s constitutional and legal obligations.
