Alert Sign Dear reader, online ads enable us to deliver the journalism you value. Please support us by taking a moment to turn off Adblock on Dawn.com.

Alert Sign Dear reader, please upgrade to the latest version of IE to have a better reading experience

.

Dar urges Islamic banks to finance ‘growth’

Updated November 28, 2015

KARACHI: Federal Fina­nce Minister Ishaq Dar said on Friday that after consolidation, the government was focusing on growth and employment, and highlighted the role of the private sector and banks in the new phase.

Speaking at the inauguration of Centre for Excellence in Islamic Finance (CEIF) at the Institute of Business Administration (IBA), the finance minister criticised Islamic banks and said that they were not doing business with the real economy.

These banks look towards the government for use of their liquidity. Islamic banks keep maximum liquidity in government papers.

He said the Islamic banks should at least do 30 per cent of their business with the real economy, like financing small and medium enterprises (SMEs), micro-businesses and agriculture.

He said globally there was a rush to catch Islamic funds mainly after the financial crisis of 2007-08. The world-wide size of Islamic banking is about $2.6 trillion, he added.

He urged all banks to move fast to get maximum share in Islamic financing. There should be a target of 20 to 30pc share of Islamic financing in the banking industry in the next two to three years.

He said there was a need to develop a consensus and the establishment of CEIFs would help remove irritants in the way of the Islamic mode of financing.

He said Islamic Department has been established in the Securities and Exchange Commission of Pakistan (SECP).

Earlier, Governor, State Bank Ashraf Mahmood Wathra and Dean-Director of IBA Dr Isharat Husain discussed the purpose of the CEIF. The centre established in Karachi is the third one after Lahore and Peshawar.

Published in Dawn, November 28th, 2015