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Tuesday, 21 January 2014

Human resource development: Training in Islamic banking comes at centre of strategy

With the change in government after the May 2013 elections, there is a surge in interest in reviving Islamic banking in Pakistan. The government has responded well by committing to use a Shariah-compliant structure of financing under the Prime Minister’s Business Loans Programme for the Youth.
Finance Minister Ishaq Dar has also set up a committee to promote and strengthen Islamic banking in the country. It is expected that MCB Bank will soon spin off its Islamic banking business into a fully-fledged subsidiary, separately licensed by the State Bank of Pakistan (SBP).
Bank Alfalah, which has the largest Islamic banking business after Meezan Bank, will also consider a subsidiary model for its Islamic banking operations if the SBP decreases capital requirements for Islamic banking subsidiaries of conventional banks.
Despite this positive outlook, human resource development for the Islamic banking industry will remain a challenge. Although there are a number of internationally benchmarked qualifications in Islamic banking and finance, offered by a number of training providers in UK, UAE, Bahrain, Malaysia and some other countries, Pakistan has yet to develop a comprehensive training programme for Islamic banking personnel.
Leadership role
The National Institute of Banking and Finance (NIBAF), a training wing of SBP, has developed a certificate course in Islamic banking and so far it has successfully conducted 25 trainings under this programme.
However, a lot more needs to be done in this respect. Given the leadership role Pakistan has played in the development of global Islamic banking and finance industry, the country needs to exploit it by offering comprehensive training programmes from undergraduate and post-graduate degrees to professional qualifications.
In this respect, Malaysia has already gained prominence by setting up INCEIF – a dedicated university for teaching Islamic banking and finance – and its sister research organisation, the International Shariah Research Academy (ISRA) for Islamic Finance. The government of Malaysia has contributed generously to endowments supporting these organisations – 500 million and 200 million ringgit (Rs16 billion and Rs6.4 billion) respectively.
In Pakistan, there already exists the International Islamic University Islamabad (IIUI), which has historically played an instrumental role in the development of Islamic banking and finance around the world. According to an online survey conducted by, IIUI ranks number one in the world in terms of its contribution to the global Islamic financial services industry, but university authorities have failed to market it as a premier institution of higher learning in Shariah law and Islamic finance.
Well thought-out strategy
The popularity of IIUI as an attractive destination for Islamic banking and finance education was affected by the political and social instability in the country. At one time it was considered a preeminent institution in the teaching of Shariah, and Islamic economics and finance, attracting students from USA, Europe, Africa and Far East Asia.
Today, as the country recovers, it is necessary that IIUI regains its previous position through the adoption of a well thought out international marketing strategy.
Islamic finance training is one area that should be brought to the centre of any proposed strategy. To conceive of the benefits of rebuilding the global reputation of IIUI, one only needs to look at the success of Durham University and International Islamic University Malaysia.
Both universities offer programmes in Islamic economics and finance that have gained traction, yet their Islamic banking and finance programmes were formulated well after IIUI. Today, students from around the world flock to both institutions, gaining from the excellent programmes but also contributing to the local economy.
The practice of Islamic banking and finance in Pakistan is certainly the most authentic in the world. The SBP and the Securities and Exchange Commission of Pakistan (SECP) have maintained a strict regulatory regime to ensure that Islamic banking and finance continues to fulfil stringent Shariah requirements –which  will allow Pakistan to resume its leadership role in the industry.
Some of the popular qualifications in Islamic banking and finance
  • Islamic Finance Qualification (IFQ) offered by Chartered Institute of Securities and Investment, London (UK)
  • Various certificate and diploma courses in Islamic banking and Takaful offered by CIMA, London (UK)
  • Certified Qualification in Islamic Finance (CQIF) offered by IBFIM, Kuala Lumpur (Malaysia)
  • Certified Islamic Finance Professional (CIFP) offered by INCEIF, Kuala Lumpur (Malaysia)
  • In addition, a number of universities in the West as well as in the Muslim world are offering academic programmes, from bachelors to doctorate levels, in areas related to Islamic banking and finance
Published in The Express Tribune, January 20th, 2014.
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