KARACHI: The Centre for Excellence in Islamic Finance (CEIF) at the Institute of Business Administration (IBA), in collaboration with Meezan Bank, was launched on Friday.

The centre aims to bridge the gap between trained human resource and industry’s growing requirement. It will offer short- and long-term courses/degree programmes in Islamic finance, carry out research and share knowledge with all relevant stakeholders.

IBA Dean and Director and CEIF Chairman Ishrat Husain said that standardisation of Shariah-compliant Islamic banking was a major issue. “What Malaysian scholars find acceptable, Pakistani scholars don’t agree to, and then Bahrain scholars don’t agree with ours,” he observed.

“We have bankers who don’t know shariah and we have Islamic scholars who have no clue about conventional banking,” he said, adding that people for reasons embedded in faith prefer Islamic financial services.

Talking about the viability of Islamic banking and low volumes, he said, “There are people who will say interest is not right but keep their money in commercial banks. If they have a viable credible option they would clinch it”.

He stressed the need for parallel Islamic and commercial banking systems, adding: “Pakistan is part of the global financial system and we cannot switch it off.”

Responding to a question on Islamic Inter-Bank Offered Rate (IBOR), CEIF Founding Director and Executive Vice-President Meezan Bank Ahmed Ali Siddiqui said that Pakistan can launch it immediately since there was no technical hurdle. “The challenge is, how many people will go for IBOR,” he questioned.

He stressed that Islamic financial sector is set to grow with public sector projects funding, Islamic agri finance for the largely untapped agricultural sector, Islamic microfinance and branchless and mobile banking.

“Overall, the industry will grow globally by 25 per cent over the next five years, with a projection of

$5 trillion,” he said. Pakistan is likely to announce Rs355 billion sukuk issued against Jinnah International Airport after the Rs233bn matures on Nov 21. In this regard, the SBP recently approved the Shariah Board structure comprising of Meezan Bank, Dubai Islamic Bank and Standard Chartered Bank, he said.

Published in Dawn, November 14th, 2015