DG SBP for fully embracing true Islamic financial system value

KARACHI: Saleem Ullah, Deputy Governor of the State Bank of Pakistan (SBP), has underscored the importance of fully embracing the true value of the Islamic financial system being advanced by the Government of Pakistan.

“While the emphasis has primarily been on offering Shariah-compliant alternatives to conventional banking products, it is crucial that we go beyond this,” he stated. “We must provide a genuine Shariah-based alternative that aligns with Islamic principles in both structure and spirit.”

Addressing at the 8th International Conference on Islamic Banking and Finance (ICIBF 2024) hosted by the Institute of Business Management (IoBM) here on Tuesday, he further emphasized that transforming the entire banking ecosystem is essential to achieving the collective goal of realizing a true Islamic economic system. “We must move beyond this mindset and embrace the Islamic economic system for the greater good”, he added. He called for the creation of a fair, just, and equitable system, one that requires a collaborative approach from all stakeholders.

The 8th ICIBF was attended by Presidents, CEOs, financial experts, and policymakers from Pakistan’s banking and finance sectors to discuss the future of banking and finance industry in lieu of Islamic banking. This was the first major international conference to examine the constitutional amendment mandating the elimination of all forms of Riba from banks by 2028. This calls for a major disruption in the banking industry as mentioned by Dr. Ishrat Hussain, Former Governor, State Bank of Pakistan.

Dr. Ishrat Husain issued a wake-up call to the banking and finance industry, warning that a solid approach by the relevant authority’s risks undermining the core principles of Islamic banking. He highlighted that the current tax system is arbitrary and regressive, penalizing honest taxpayers while encouraging evasion, fake receipts, and other malpractices.

In his welcome address, Talib Karim, President, IoBM said that, as an educational institution, it is our responsibility to guide students, our future leaders, towards transforming financial institutions from traditional to Islamic models. He highlighted that one of the biggest challenges we face is the shortage of skilled manpower, which we must work to overcome.

ICIBF 2024 provided a platform for scholars, practitioners, and policymakers to discuss trends, challenges, and opportunities in Islamic finance. International speakers from Malaysia, Bahrain, the USA, Australia, the UK, and Saudi Arabia participated both in person and online.

Copyright Business Recorder, 2024