The Islamic banking industry could play a vital role in eradicating poverty and inequality from Pakistan, said former State Bank of Pakistan (SBP) governor Dr Ishrat Husain.
Speaking at the International Conference on Islamic Banking and Finance as a chief guest on Wednesday, Husain highlighted that a lot of work was needed to educate the public about the difference between Islamic and conventional banking.
Quoting the growth figures of Islamic banking, he said that 18% market share and 30-32% growth rate was a good achievement, but it was below expectations.
In 2001, Islamic banking was expected to achieve 25% market share by 2021, he recalled and lamented that the target could not be met.
He pointed out that Islamic banking was not only Riba-free, but it was also different from conventional banking.
“It has a purpose that we have to take care of people who are disadvantaged, poor and vulnerable and unless we bring them along with others at the same level of living we are not performing our function as Islamic bankers,” he added.
He urged the Islamic banking industry to blend the essential instruments of Islamic system of finance including Zakat, Takaful and Qarz-e-Hasana to introduce Shariah-compliant products and services, which could actually target the marginalised groups.
Highlighting the importance of micro financing for having a social impact, Husain urged Islamic banks to develop microfinance products, especially for backward areas of the country.
Published in The Express Tribune, November 4th, 2021.
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