Over the years, Islamic deposits have posted an enviable growth rate of more than 30% per annum. Since commencement of global financial crisis, overall growth of regular commercial banks has remained subdued. However, a point to be noted that in the aftermath of 2008 crisis, Islamic banks have not only emerged stronger but also performed relatively better as compared to conventional banks, notwithstanding the inherent credit risks.
Although there has been some criticism on the system and critics feel that this is just a change of terminologies, but if we observe the risk associated with the Islamic banking products, we can then easily figure out the difference that makes this banking model not only apparently dissimilar but also purely distinct from the conventional products. People need to understand that it’s the form that draws the distinction and not the similarity in substance.
At present, 5 full-fledged Islamic banks are operating in the country and 14 conventional banks have also established dedicated Islamic banking branches. Total number of bank branches exceed 10,000 and out of these over 1,100 offer Islamic banking. The share of Islamic banks in total banking business is also close to 10%. The credit of this robust growth goes to the Islamic banks and windows, Central bank, Shariah scholars and above all to the clients, who have reposed confidence in the system. It is also on record that apart from local companies, many multinational companies (MNCs), operating in
It has been clearly established during the last decade that now people believe in the strength of Islamic banking. They wish to have their accounts and carry out transactions with these banks, including designated Islamic branches of conventional banks. At present, NBP has over 1,300 conventional branches in the country with 18 dedicated Islamic Banking Branches at present. However, NBP plans to open more Islamic branches to get closer to those who wish to avail Shariah compliant banking and services.
To make strong presence in the Islamic Banking industry in
Since all NBP conventional branches are ‘Online’, we also plan to offer this major advantage to our Islamic clientele. People maintaining accounts with designated Islamic banking branches will also be able to deposit/ withdraw cash at NBP’s any conventional branch, and vice versa. This will not only deepen client relationships but also enable us to offer Cash Management, Collection Accounts, Payroll Accounts/Cards and other allied fee-based services. In future, we also plan to provide Internet, SMS, ATM debit cards and Mobile Banking facilities to our customers.
To create awareness among masses about Islamic Banking services, NBP has re-launched Islamic Banking with a new brand that is "Aitemaad", which is synonymous with the trust of people on NBP. To market Islamic products and services, NBP plans to capitalize on its strong brand recognition. This will help NBP to get closer to people who wish to do Islamic banking, by offering innovative asset and liability products. Going forward, a comprehensive range of Islamic Banking products and services will be available to our customers.
To ensure smooth functioning and adherence to Shariah compliant operations, NBP Islamic Banking has taken on board Mufti Ehsan Waquar as Shariah Advisor. Mufti Ehsan possesses a unique combination of religious and contemporary education. He has served at institutions like
It is very encouraging that the Central bank has also initiated generic awareness campaigns, which will benefit all the banks offering Shariah compliant products and services. Islamic Banking industry in
To find out practical ways and means to maximize equity-based financing instead of the widespread debt-based system.
To suggest solutions for the Islamic secondary market/money market for liquidity management
To chalk out a roadmap and propose a time plan for progress of different phases of Islamic banking.
To conduct an analysis of the possible legal obstacles in converting conventional banking into Shariah-compliant banking and the changes required to remove these obstacles.
Looking at the potential
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