Islamic banking modes and products in Pakistan are steadily moving up in terms of financial transactions, reveals the sector’s new report.
Islamic modes, financing and products have captured at least 15 per cent of the overall financial market share in 2016 as new products were being introduced and more customers were attracted, reported Khaleej Times.
It says that Islamic banking and financial modes were spreading in the country and its business with several other countries abroad, including the UAE, Saudi Arabia, Malaysia and other countries.
The interest in doing business with an Islamic and even conventional modes with Islamic countries was illustrated by the results and profits attained by the UAE-based banks Alfalah and Bank Al Meezan.
Meezan Bank is Pakistan’s eighth largest bank with 450 nationwide branches. The bank has been recognised as “the best Islamic bank in Pakistan”, by many Pakistani and international organisations.
According to the report, as Islamic banking and financial modes move ahead, the financial market regulator – Security and Exchange Commission of Pakistan (SECP) – has advised insurers running Window Tafakul operations to prepare a separate set of financial statements for general Takaful operations as a standalone Takaful operator.
The insurance penetration, measured as total premiums to gross domestic product, has hovered at 0.7 per cent of the GDP for the last decade. Now it stands at around one per cent of the GDP. The growth was encouraging for Islamic financial products market.
A historic review of the Islamic sector by the State Bank of Pakistan (SBP) and the financial market analysts shows that the Islamic banks alone witnessed a growth of 23.3 per cent in CY-14, totaling Rs 1.070 trillion.
It was Rs 868 billion in CY-13. Pakistan had 22 Islamic Banking institutions, including five banks, and 17 conventional banks which operate 1,574 Islamic Banking Branches. The system has 929 Islamic Windows which are run by conventional banks. At the end of cy-14, the market share of Islamic banking assets was 10.4 per cent and deposits were 11.6 per cent.