Inauguration of Centre for Excellence in Islamic Finance

The Centre for Excellence in Islamic Finance (CEIF) was inaugurated by Federal Finance Minister, Mr. Mohammad Ishaq Dar on Friday, Nov 27 2015 at IBA City Campus. Also present on the occasion was Governor SBP, Mr. Ashraf Wathra. Dr. Ishrat Husain in his welcoming address appreciated the efforts of SBP and Meezan Bank. While elaborating on the objectives of the Centre, he stated that it is expected to provide qualified human resource to the industry and play a pivotal role in developing shared understanding of Islamic finance principles among the participants.

Governor SBP speaking at the occasion stated that the Centre is expected to develop multipronged strategy to meet both long term and short term needs of the industry. It will provide fresh trained human resource to the industry, improve existing human resource capacity, invest in research and collaborate with other institutions achieve excellence in the field.

Senator Mr. Mohammad Ishaq Dar's commended the State Bank of Pakistan for taking this initiative of filling in the gap of human resources and expertise in Islamic finance by setting up these Centres of Excellence in Islamic Finance at three most reputable institutions of Pakistan i.e IBA, Karachi; LUMS, Lahore and IMS, Peshawar. He further stated that Islamic banking has a great future as the current global financial architecture has failed to deliver stability, solidarity and sustainability to the financial system. Islamic banking is an attractive candidate to present itself as an anchor of financial stability and social purposefulness.

The government is committed to the cause of increasing Islamic finance and has taken various steps in this direction in the past two years. Establishing of a Steering Committee under the leadership of Mr. Saeed Ahmed, the Deputy Governor of SBP, the recent launch of Karachi All share Islamic Index, Setting up an Islamic Finance Department in SECP, issuance of sukuk and Islamic capital market reforms are some of the efforts in this regard. The Ministry of Finance is taking steps to make shariah compliant financing its first choice in infrastructure building and long term financing needs. In the next few years the share of Islamic banking should reach 20-30% of total banking.

With banking penetration of 13% (according to World Bank) in Pakistan, banks have a huge untapped potential to increase financial inclusion. Islamic banks have the risk sharing modes which can be developed to support SME, Micro finance and agricultural financing. With branchless banking and mobile banking making inroads, the situation is ripe with opportunity. Some of the voluntary exclusion due to shariah concerns can be alleviated by Islamic banks.

The role of Islamic banks should expand to build the real economy and focus on SME financing, which is the bank bone of any economy. Financial inclusion and shared prosperity can be achieved if Government and the Financial Sector work together to achieve these goals. The Chief Guest concluded the speech with thanking all the participants.

The Vote of Thanks was delivered by the Director of the Centre, Mr. Ahmed Ali Siddiqui who said that banks will rise to the challenges and deliver on goals of financial inclusion.