Seminar on Islamic banking: ‘95pc of revenue is consumed in paying off domestic loans’

LAHORE: The speakers at an Islamic banking awareness seminar highlighted that around 95 percent of national revenue is consumed in paying off domestic loans, and stressed that the country’s ongoing economic challenges are rooted in deviating from Islamic financial teachings.

The seminar was organised by the Pakistan Industrial Associations Front (PIAF) in collaboration with the State Bank of Pakistan (SBP) and MCB Islamic Banking at its central office here on Thursday with a view to encourages expansion of Islamic banking services in industrial and commercial hubs of the country.

The seminar was graced by PIAF Chairman Faheem ur Rehman Saigol and Chief Manager of the State Bank of Pakistan, Tariq Riaz, as the guests of honour. A large number of participants including members of the PIAF Executive Committee, Executive Committee members of the Lahore Chamber of Commerce and Industry (LCCI), and prominent figures from the business community attended the event.

While addressing the seminar, Faheem ur Rehman Saigol emphasized the growing significance of Islamic banking, declaring it a vital need of the hour. He stated that Islamic banking, being strictly in accordance with Shariah, stands in clear contrast to the interest-based capitalist financial system. He urged the business community to gain proper awareness of the rules, regulations, and benefits of Islamic banking and eliminate any misconceptions or reservations they may have.

The PIAF Chairman underscored the need for Islamic banking to be implemented in its true spirit. He reiterated PIAF’s strong commitment to encouraging the availability and accessibility of Islamic banking services in industrial and commercial zones across Pakistan.

Faheem ur Rehman Saigol further called upon the State Bank and Islamic financial institutions to expand their branch networks and develop customized products tailored to the needs of SMEs and manufacturers. He also suggested bridging the awareness gap in Islamic finance principles among trade bodies, especially targeting small-scale traders and the cottage industry. To strengthen this initiative, he proposed the formation of a consultative committee comprising representatives from SBP, Islamic banks, and business/trade organizations to facilitate regular feedback and cooperation.

In his keynote address, Tariq Riaz, Chief Manager of the State Bank of Pakistan, stated that by January 2028, Pakistan’s entire banking system will shift to an Islamic framework. He described Islamic banking as a moral, interest-free solution aligned with Islamic beliefs, which builds trust among customers who prioritize Shariah-compliant financial dealings. He noted that a growing segment of exporters and SMEs is now turning to Islamic financing to meet their working capital, trade, and asset acquisition needs.

Tariq Riaz emphasized the importance of spreading awareness about Islamic banking-related issues within the business community. He announced that this was the first in a series of awareness sessions and that many more will be organized to address the concerns and queries of stakeholders. The event concluded with an enlightening talk by Dr. Naveed Aslam, Head of Shariah Compliance, who explained the core principles of Islamic banking and addressed questions from PIAF Executive Committee members. PIAF Secretary Abdul Saboor Sheikh coordinated and supervised the event arrangements.

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