KARACHI: Islamic banks to distribute the profit among shareholders and depositors alike and on the basis of Islamic principle of justice.
Speakers at the 1st Islamic Finance Expo and Conference said depositors hand over their savings to Islamic banks and it was their duty to give a fair return to depositors on their saving.
They advised Islamic banks to simplify housing loans to attract people who want to buy houses on the basis of Shariah financing. They warned the banks to avoid using ‘haram funds’ (forbidden money) for Islamic banking transactions. Forbidden funds cannot be converted into halal (permissible) funds through Islamic banking, they observed. Publicity Channel, State Bank of Pakistan (SBP) and Ernst and Young organized the event at Karachi Expo Centre on Saturday.
Islamic banking expert and Shariah advisor Mufti Rafi Usmaninoted said rate of return by the Islamic banks should be equal to inflation rate so that the value of their savings should not eroded.
He asked Islamic banks to simplify the procedures for housing loans, as the current process was very complicated. We are receiving scores of complaints as people are facing hardship in obtaining housing loans, he added.
Mufti Usmani said government should take steps to eliminate interest bearing banking system in the country and also advised business community to come towards Islamic banking. He lauded the role of SBP for the growth of Islamic banking in Pakistan.
Vice Chancellor Ripha International University Islamabad, Dr Anis Ahmad suggested Islamic banks to give equal return to shareholders and depositors. It should be based on the principle of justice, he noted. He warned Islamic banks not to use illegal funds in Shariah banking as this money could not be used in the Islamic mode of financing.
Additional director Islamic Banking Department, SBP Zulfiqar Ali Khokhhar said Islamic banking industry was growing an average rate of 30 percent since last 12 years. He said the share of Islamic banking in overall banking industry in Pakistan would rise from 8 percent to 12 percent in next two years.
CEO of Bank Islami, Hasan A Bilgrami said at least one Islamic bank would make its position among top five in Pakistan in next 5 to 10 years. My bank would double its branch network from 100 in next two years, he noted.
Chairman NBFI and Modaraba Association of Pakistan, Basheer Chowdhry said modarabas have maintained their profitability, assets and equity base despite liquidity crunch after global economic meltdown. He said 11 out of 26 modarabas have declared cash dividends last year ranging between 2 to 73 percent.
(Daily Times / 20 May 2012)
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