Three Key Challenges in the Elimination of Interest: Jameel Ahmed
Regulators, Academia, and Banking Must Collaborate to Solve Issues of Local Islamic Banking Industry
Governor of the State Bank’s Speech at Event Organized by “Islamic Bank of Pakistan” Under Private Bank
KARACHI ( WEB NEWS )
Governor of the State Bank of Pakistan, Jameel Ahmed, stated that Islamic banking is growing both globally and locally. He identified three fundamental challenges in the elimination of interest. Speaking at an event titled “Islamic Bank of Pakistan” organized under a private bank, the Governor of the State Bank said that the global volume of Islamic banking has reached 3.7 trillion dollars, and to keep up with this, Pakistan must increase its pace.
He mentioned that the vision is to completely eliminate interest by 2028, but there are three key challenges to achieving this goal. He explained that if Sharia principles are not fully implemented, it will lead to setbacks. Additionally, there are difficulties in transitioning government bonds to Islamic ones, and Sharia experts need to find a solution to this. If this issue is not resolved, the growth rate of Islamic banking will slow down.
The Governor emphasized the need to develop an inter-bank market within Islamic banking, address how to provide liquidity to Islamic banks, and raise awareness about Islamic banking while training a skilled workforce. It is essential to provide complete awareness about Islamic financial products to employees of Islamic banks.
He further stated that both the local Islamic financial industry and global Islamic banking need to be developed simultaneously. The State Bank has established a high-level steering committee for the rapid growth of Islamic banking, which includes the government, State Bank, SECP, and financial institutions. He also acknowledged that IFIs (Islamic Financial Institutions) have played a significant role in enhancing the standards of Islamic finance. To resolve the issues faced by the local Islamic banking industry, regulators, academia, and banking must work together.