KARACHI, Feb 21: The Governor, State Bank of Pakistan, Dr Shamshad Akhtar, has asked the Islamic banks to increase their presence in rural areas and diversify their network for the benefit of the under-served.

Speaking at the inaugural ceremony of 100th branch of Meezan Bank here on Thursday, the SBP governor said that Islamic banks needed to focus on enhancing farm and non-farm lending by opening up branches in rural areas.

She also spoke about new branch licensing policy and said that the central bank had allowed substantial growth in branch network.

She said the licensing policy was ‘very liberal’ under which each bank was required to set up at least 20 per cent of the total branches in rural areas for the purpose of enhancing the outreach of banking services.

Dr Akhtar said microfinance banks had been allowed to open as many branches they wanted in rural areas.

“Along the same lines, I think Islamic banks may also be allowed to set up as many branches in rural areas as they want,” she remarked and added that there was also a unique opportunity for Islamic banks to do infrastructure financing and long-term lending.

She said Islamic banks could play a pivotal role in the development of rural areas.

“Rural prosperity has increased over the years and capacity to buy and saving is higher in rural areas,” the SBP governor said.