Streaming Media

Media Type

Keynote Address

Publication Date

6-27-2001

Description

I am extremely pleased to be present here this afternoon to share my thoughts on the role of Modarabas in the financial system of Pakistan. As your association is in the process of soul searching let me add a few words of mine to this dialogue. I hope you will take my advice in good stride as constructive suggestions to strengthen and improve your sector. Modaraba has established itself as a well understood Shariah compliant instrument of financing in Pakistan. It has been practised for the last 20 years and we have gained a lot of experience in its operations and management. We have developed an institutional framework which is acceptable to the scholars and also clarified the initial confusion regarding the regulatory responsibilities. The dual structure between SECP and SBP has given way to a single regulatory agency which is SECP. We had therefore logically expected that Modarba will provide a transit point in our path towards Islamic financial system. We thought we could apply the experience gained from this mode of financing and scale it up and replicate it throughout the system. But let me confess that I am disappointed that Modarabas haven't taken off so far in this country despite such a long standing and their contribution in the financial sector has been insignificant.

Notes

Keynote Address at the Seminar held by Modaraba Association of Pakistan on June 27, 2001 at Karachi.

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