Karachi - Shaikh Khalid Tawab, Senior Vice President of FPCCI, has appreciated the decision of Finance Minister to constitute a committee for the implementation of recommendations of the Steering Committee on the promotion of Islamic Banking.

In a statement issued here on Monday, he said that the expansion and promotion of Islamic Banking was need of the hour because it was risk-sharing and asset-backed in nature, and was growing and unaffected despite global financial crisis.

He also lauded the role of State Bank in promoting the Islamic banking and setting up centers of excellence, launching of All Islamic Share Index and Policy framework for establishment of Islamic Banking subsidiaries in Pakistan.

The FPCCI Senior Vice President further said that Islamic Banking had become an emerging field in global financial market and the time had proved that it had a tremendous potential and was growing at a very fast pace all around the world.

He added that given Pakistan’s more than 95 percent of Muslim population, and a constitutional obligation of ensuring Riba-free economic system, it was all more important to expand the Islamic Banking.

While quoting the statistics, he disclosed that Islamic financial country index had ranked Pakistan 10th in the world in terms of developing, promoting and advocating Islamic banking and finance.

He further said that the size of total assets of Islamic Banking was just 11.4 percent of the total assets of all the banks.

“Around 13.2 percent share in total deposits of all the banks need special attention and encouragement for enhancement,” he noted.

Tawab added that although Islam had banned the interest, but it did not mean that capital was costless in an Islamic system since it allowed profit-sharing for investment.

He further said that at present, foreign banks in Pakistan had also opened Islamic Banking windows and entered into competition with commercial banks.

“They have also initiated this practice in European countries as well where one third of the population is Muslim,” he informed.