Islamic banks may begin issuing credit cards by 2011

Islamic banks are likely to start issuing credit cards by 2011, Country Head, Al-Baraka Bank (Pakistan) Limited, Shafqat Ahmed informed business community on Wednesday. Speaking at first meeting of year 2010-11 of Banking and Insurance Sub-committee of Karachi Chamber of Commerce and Industry (KCCI), he said Al-Baraka Bank was also working on some new products including personal loan, which will probably be introduced next month.
Replying to a question regarding opening of Islamic bank branches in rural areas, he referred to a condition of State Bank of Pakistan (SBP) under which all Islamic banks have to open 20 percent branches in rural areas. He hoped that there would be lot of Islamic bank branches operating in rural areas within next five years.
He did not agree with a question that Islamic banking is costly, as compared to conventional banking and said that in this competitive world if Islamic banking were costlier, its survival would be difficult. The country chief admitted that there are still doubts in the minds of people about Islamic banking. We practice Islamic banking on Fatwas and guidance of Islamic scholars.
There are guidelines about Islamic financing in Islam but there is no specific guidance about Islamic banking. He further elaborated that it is mandatory for all Islamic banks in the country that their balance sheet must have audit certificate and Sharia Board certificate and all the transactions should be made according to Sharia.
He said that the bank has Sharia board and all the products are carefully designed to fulfil Sharia requirements. Replying to Islamic bank investment in shares, he said that all over the world, including Pakistan, there is a list of Sharia compliant shares. Islamic banks can only invest in these shares, he added.
Referring to Islamic Banking market share in overall banking sector, he said that Islamic baking market share is only 6 percent at present and likely to cross 12 percent by year 2012. He gave a detailed briefing about operation and products of Al-Baraka Bank.