Publication Date

11-4-2020

Description

First of all it is a great pleasure and honour for me to be participating in this particular Conference. I was here, I think a year ago and I always give importance to events of this nature as they create awareness about Islamic finance. Let me also pay a tribute to the founder of this fine Institution which will be celebrating 25 years. This is because of Mr. Shahajan Karim a senior colleague of mine in the civil service that he took upon this challenge upon himself at a very difficult time. I have seen the transition from a very small institution consisting of few rooms to what it is today a whole complex. So we need to always remember our benefactors who have actually done a great job. We seem to forget those people. Let me also respond to Mr. Bashir Jan Mohammad’s remarks almost Islamic Banking. Islamic Banking introduced in 1980s during Zia-ul-Haq’s regime was declared un-Islamic by the Federal Shariat Court. The court asked us i.e. the State Bank of Pakistan when I had the privilege of being the Governor to transform the entire banking system of Pakistan to Islamic banking system in just one year’s time. Doing so in such a short period would have create a havoc for economic activity in this country and also disengaged Pakistan from the global economy. So we formed a commission under the Chairmanship of Mr. Imtiaz Hanafi, who was one of my predecessor consisting of scholars and practitioners. They came up with the proposal that Islamic banking should run in parallel with the conventional banking. It is left up to the customers if they want to switch from the conventional banking to the Islamic banking or they want to stay with the conventional banking. No central bank or no government has the power to act on behalf of the people who know what is good for them. Banking customers are the ones who can make that decision. Today we have a parallel banking system in place and would continue until complete transition takes place and the entire banking system becomes Islamic. Therefore, some of the products and services which Islamic banking offer today have to be at the same level playing field as the conventional banking otherwise nobody except those who seriously believe in it will shift to Islamic banking. We carried out a survey and only a minority said that they would switch from Conventional banking to Islamic banking on the basis of faith in the new system. Because as Mr. Shuja Kidwai said we preach to be good Muslims but we do not practice what is actually preached. Hammari niyat ka fatoor hay. We talk too much about Islam but we don’t practice what are really Islamic values. I now turn to the topic of today.

Notes

"Chief guest address at Annual Islamic Finance Conference", organized by Institute of Business Management, Karachi November 4, 2020

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