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Pakistan Developing Shariah-Compliant Products for Money Market
By Khalid Qayum
June 16 (Bloomberg) -- Pakistans central bank is developing Shariah-compliant products for its interbank money market as a shortage of investment options hurts earnings at Islamic lenders.
The products will provide some flexible and convenient mechanism for managing the surplus liquidity in the Islamic banking industry, according to a statement by the State Bank of Pakistan released late yesterday, citing Acting Governor Yaseen Anwar. It will also provide a platform for developing benchmarks for the pricing of Islamic finance products.
Pakistan, the worlds second-largest Muslim country, plans to double its Islamic banking industry in the next three years to 12 percent of the size of its conventional one. Islamic banking globally is growing at twice the pace of conventional banking, Lim Hng Kiang, Singapores trade and industry minister, said June 14 at an Islamic finance conference.
The shortage of bankers trained in Islamic services is a challenge that poses a serious threat to the growth and development of the industry on sound footings, Anwar was cited as saying by the central bank. The pace of growth of the industry is much faster that the supply of trained and well qualified Islamic bankers.
The $1 trillion industry for financial services complying with Muslim law,
which prohibits interest payments, is expanding 15 percent annually, according to Afaq Khan, chief executive officer at Standard Chartered Plcs Islamic Unit in Dubai. To ensure Islamic investments meet Shariah principles they have to be vetted by recognized scholars. Transactions are based on the exchange of asset flows rather than interest.
Sukuk Sales
The Islamic finance industrys assets may reach $1.6 trillion by 2012, according to the Kuala Lumpur-based Islamic Financial Services Board, a standards setting body.
Pakistan first introduced Islamic financial services in 2001, and sold its first overseas sukuk notes in January 2005, raising $600 million from international investors. Pakistan had 42.2 billion rupees ($491 million) of outstanding domestic sukuk, or Islamic bonds as of April 30, less than 1 percent of its 4.6 trillion rupees of regular debt, central bank data show.
The country plans to increase the number of full-fledged Islamic banks to eight from six by 2013, Salim Ullah, director for Islamic banking at the State Bank of Pakistan, said this month.
Pakistan Developing Shariah-Compliant Products for Money Market - BusinessWeek
By Khalid Qayum
June 16 (Bloomberg) -- Pakistans central bank is developing Shariah-compliant products for its interbank money market as a shortage of investment options hurts earnings at Islamic lenders.
The products will provide some flexible and convenient mechanism for managing the surplus liquidity in the Islamic banking industry, according to a statement by the State Bank of Pakistan released late yesterday, citing Acting Governor Yaseen Anwar. It will also provide a platform for developing benchmarks for the pricing of Islamic finance products.
Pakistan, the worlds second-largest Muslim country, plans to double its Islamic banking industry in the next three years to 12 percent of the size of its conventional one. Islamic banking globally is growing at twice the pace of conventional banking, Lim Hng Kiang, Singapores trade and industry minister, said June 14 at an Islamic finance conference.
The shortage of bankers trained in Islamic services is a challenge that poses a serious threat to the growth and development of the industry on sound footings, Anwar was cited as saying by the central bank. The pace of growth of the industry is much faster that the supply of trained and well qualified Islamic bankers.
The $1 trillion industry for financial services complying with Muslim law,
which prohibits interest payments, is expanding 15 percent annually, according to Afaq Khan, chief executive officer at Standard Chartered Plcs Islamic Unit in Dubai. To ensure Islamic investments meet Shariah principles they have to be vetted by recognized scholars. Transactions are based on the exchange of asset flows rather than interest.Sukuk Sales
The Islamic finance industrys assets may reach $1.6 trillion by 2012, according to the Kuala Lumpur-based Islamic Financial Services Board, a standards setting body.
Pakistan first introduced Islamic financial services in 2001, and sold its first overseas sukuk notes in January 2005, raising $600 million from international investors. Pakistan had 42.2 billion rupees ($491 million) of outstanding domestic sukuk, or Islamic bonds as of April 30, less than 1 percent of its 4.6 trillion rupees of regular debt, central bank data show.
The country plans to increase the number of full-fledged Islamic banks to eight from six by 2013, Salim Ullah, director for Islamic banking at the State Bank of Pakistan, said this month.
Pakistan Developing Shariah-Compliant Products for Money Market - BusinessWeek
