KARACHI, Sept 11: 80 per cent Pakistanis want Islamic products with all the facilities that a conventional banking product provides, including the same return on products.
This was revealed by Islamic bankers at the Dawn — Asia Finance Conferences — third series — held at a local hotel on Tuesday.
Interestingly, most of the participants advocating and justifying Islamic banking and its products were initially conventional bankers. Their presentations and high hopes were both enthusiastic and emotional but it gave an impression that these bankers found a new option to tap the resources with the same agenda of money making.
The State Bank’s director Islamic Banking division Pervez Said rubbed off the Islamic concept prevailing for centuries that the fixed return on money loaned to some one is un-Islamic (Riba) and said it was a wrong concept. His argument was simple as he cited the example of renting a house at a fixed rate fit for justifying the fixed return on money is quite Islamic.
Speakers were found ready to give Islamic colour to each and every product created by conventional banks, even willing to bring Islamic Credit Card. These Islamic bankers joined the race with the conventional bankers whose sole purpose is to create wealth for few.
M.A. Mannan, deputy CEO of Dubai Islamic Bank said that 80 per cent Pakistanis liked to prefer Islamic products ‘if all things are equal.” He explained that if an Islamic product had the same world standard quality, same return on product and same facility like a competitive conventional banking product has, people would get Islamic product instead of conventional product.
He also claimed that 90 per cent customers, who are willing to get Islamic products, do not question as to how a particular product is Islamic. They only want to get assurance from the bank that the product is Islamic like they get an assurance from a restaurant that the food is Halal.
His observation shows that Pakistanis take the Islamic and non-Islamic issue very lightly but the poor growth of the Islamic banking showed that Pakistanis were still reluctant to come close to the Islamic products. Total Islamic banking is just 2.3 per cent of the conventional banking.
However, most of the speakers said that the Islamic banking would grow like mobile phones and mineral water, which took time to catch the pace and reached a record level. There is a need to spend money for the propagation of the Islamic banking and products like the mobile phone and mineral water companies did. Creating awareness is the biggest target, they said.
Pervez Said said that in future the conventional banking would be unable to match the high standard of Islamic products and the reason is that the conventional banking stands on just one block of promising contract while the Islamic banking has 21 blocks.
“Islamic banking is not revolutionary but it is evolutionary in nature, which started in mid 60s in Pakistan and now reached at this level. I am very much satisfied with the pace of growth,” said Pervez Said.
Mohammad Imran, country head of consumer banking, Bank of Islami spoke on the Islamic wealth management. He said Islamic bankers were targeting those, which were already the target of conventional banking. There is a need to target those who were not accessed by the banking industry.
He said targeting masses would give boost to the Islamic banking.Nadeem Hussain, president and CEO of Tameer Micro Finance Bank was also of the view that there was a huge gap in banking in the rural areas. He said rural population needed credit for seeds, fertilisers, land and tractors. All these demand small loans for small farmers.
He said 53 per cent of rural population was not engaged with the agriculture, and instead they were employees of cottage industry. They need access to small credits.
Takaful (Islamic insurance) was also discussed in the conference. Speakers suggested that Takaful, which is still in infancy in Pakistan, should move to the rural areas, where farmers need to protect their crops and cattle.
Earlier, Chairman Senate Muhammad Mian Soomro in his welcome address pinned great hopes on the growth of the Islamic banking in Pakistan.