It is recently reported that the assets of Islamic banking have doubled in the past four years and hit PKR 1.6 trillion in FY16 from PKR 837 billion in FY12, accounting to a share of 11.7 % in the total banking assets, a statement said on Saturday.
There is an even stronger growth of Islamic assets in the non-banking financial institutions (NBFI), owing to the market share of approximately 33% that they successfully secured in 2016 from only 14% in 2012.
Many analysts believe that the growth is attributable to the increase in the demand of customers and enabling regulations by the Security & Exchange Commission of Pakistan (SECP) and the State Bank of Pakistan (SBP). This was highlighted during the seminar held at the SECP’s head office.
Moreover, speaking during the seminar, the head of Islamic Finance Department at the SECP, Usman Hayat, explained that the main priority of the regulator is to develop Islamic capital market. “The SECP has recently conducted two consultation sessions with market participants to facilitate issuance of sukuk and real estate investment trust (REIT),” he said.
“The SECP is analysing industry proposals and it shall consider making appropriate amendments to the relevant regulations, further reducing the cost and hassle for both issuers and investors. The industry proposals pertaining to tax issues regarding sukuk and REIT are being referred to the FBR,” he added.
It is worth noting that, as of now, there are 21 banking institutions that are offering Islamic banking services in the country through 2,322 branches in 112 districts across the country. Adding to that, SBP has a very comprehensive approach towards the promotion of Islamic banking and is also offering enabling policy environment, Shariah governance, risk management and capacity-building.