KARACHI: Dr Shamshad Akhtar, Governor, State Bank of Pakistan (SBP), has said the Islamic financial services industry needs to consolidate itself to be able to better compete with global players through achieving scale efficiency and cost effectiveness in addition to rapidly building its capacities to standardise regulation, supervision and accounting practices, while strengthening the governance of the industry.
Delivering her keynote address as the Chairperson of the Islamic Financial Services Board (IFSB) on “Financial Globalization and Islamic Financial Services Industry” at the 5th Annual Summit of the IFSB held in Amman, Jordan, Dr Akhtar said the Islamic financial services industry has been transformed from being a peripheral activity to a sizeable industry which is attracting global interest.
She said financial globalization would foster this industry and given the inherent features and richness of Islamic principles, modalities and products’ growth, it would be beneficial for supporting the process of regional and global financial deepening. Although currently the size of the industry is small relative to the global financial system, it has promising growth prospects, she added. Continue reading
“Islamic financial services industry is becoming an increasingly important part of the global financial system. Since its inception almost three decades ago, the number of Islamic financial institutions worldwide has increased to more than 300 located in over 75 countries. Though primarily concentrated in the Middle East, African and South East Asian countries with significant Muslim populations, a number of Islamic banks and asset managers are also establishing and expanding in Europe and North America. Islamic finance now transcends the boundaries of many countries across the World. Most of the major international banks have established Shariah compliant subsidiaries and opened their own Shariah compliant banking windows. According to a recent report by a leading rating agency, the global Islamic financial industry’s Shariah compliant assets are now estimated to be worth over US$ 500 billion. These have grown at an annual rate of between 15-20% over the past decade and are expected to maintain this upward trend in the next decade and could reach $1 trillion.””….Islamic finance has come a long way from its nascent state only a couple of decades ago. However, there are challenges for the industry in terms of unifying the code of common practice and addressing the scarcity of qualified Shariah scholars and experts as well as trained professionals with in-depth knowledge of the IFI specialties. This is important for sustaining the current rate of growth in the industry.”
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