PAKISTAN ISLAMIC BANKS JOINHANDS
Pakistan’s six Islamic banks are going to set up an Islamic inter-bank pricemarket in order to stop relying on interest-based conventional banks in meetingtheir short-term funds requirements. "Things are almost finalized and an officialannouncement in this regard will soon be made," Ahmed Ali Siddiqui, head of Product Development Shari`ah Compliance at Meezan Islamic Bank, Pakistan'sfirst full-fledged Islamic bank.Pakistan has six Islamic banks, Meezan Bank, Bank-al-Islami, Global IslamicBank, Al-Barka Bank, Dawood Islamic Bank and Global Emirates Islamic Bank.They have around 500,000 customers in consumer financing and depositssectors and hold 5 percent share in the overall banking sector in the country.Meezan is the first full-fledged Islamic bank in Pakistan and was issued licenseby the State Bank of Pakistan in 1997.There is already a conventional inter-bank price market for interest-basedconventional banks in the South Asian Muslim country. "Though, the exiting inter-bank price market is not completely haram, our customers and religious scholarsfeel awkward about that because of the involvement of interest-based bankingsector," Siddiqui said.
"Therefore, the Shari`ah advisory boards of the six Islamic banks sat together afew months back and decided to set up their own interest-free price market," headded. "The major thrust of the proposed market is that the Islamic banks shouldnot depend on the conventional banking sector in order to meet short-term fundsrequirement, which is unavoidable in this field," Siddiqui explained."Therefore, we have decided to meet our respective funds requirements througheach other. We believe that the Islamic banks have sufficient funds to meet eachothers’ funds requirements." Dr Shahid Hasan Siddiqui, a Karachi-based veteraneconomist, welcomed the Islamic inter-bank price market plan. "This is a verytimely decision because the Islamic banks have been depending on interest-based banks to meet their short-term funds requirement, which confuses their customers," he told IOL. "There is no doubt about its viability. It will workInshaullah."
The banks decision is the latest sign of the boom in Islamic finance in Pakistan."This is a major step which we are going to take vis-à-vis expansion of Islamicbanking in Pakistan," said Siddiqui. He asserted that Islamic banking has gaineda boom during the last few years, especially after the simmering global financialcrunch.