PESHAWAR, Jan 20: The Frontier Assembly Tuesday adopted a bill allowing the Bank of Khyber, partially owned by the provincial government, to operate as a conventional bank in parallel of the existing Islamic mode of banking.

The house also passed Islamia College Bill, 2009 with certain amendments tabled by Abdul Akbar Khan of PPP, Israrullah Khan Gandapur (PPP-S) and Saqibullah Khan Chamkani of ANP. Under the bill the college has been upgraded to the level of university but it will be called Islamia College. Speaker Kiramatullah Khan Chaghermati presided over the proceedings.

Earlier, lawmakers of the Muttahida Majlis-i-Amal (MMA) and PML led by opposition leader Akram Khan Durrani staged walkout from the house over the rejection of a privilege motion moved by Hafiz Akhtar Ali. The walkout by the MMA lawmakers provided an easy way out to the government to pass the Bank of Khyber (Amendment) Bill, 2009 without any opposition.

The MMA and PML-N members had staged walkout from the house on Monday last when Finance Minister Engineer Mohammad Hamayun Khan presented the bill for consideration and adoption. Interestingly the PML-N lawmakers did not oppose the bill on Tuesday.

The MMA government amended the preamble of the act to develop and promote Islamic modes of financing with a vision to convert the bank into a full-fledge Islamic bank. Jamaat-i-Islami has also opposed the bill.

Mufti Kifayatullah of MMA has also submitted amendments in clause (f) of the preamble and clause 2 of the bill. According to the amendments in case of the loss the bank may start conventional banking in addition to Islamic banking and (ii) the determination of loss be confirmed by an independent audit party or firm. But due to boycott his amendments were not taken into consideration.

Finance Minister Mohammad Hamayun Khan after passage of the bill dispelled the impression that the provincial government was bent upon abolition of Islamic banking system from the BoK.

He said that now even extend the facility of the Islamic banking system to the depositors even in the branches of conventional banking. He informed the house that assets of the Islamic branches and conventional branches of BoK were Rs15 billion and Rs20 billion respectively. The loans disbursed by Islamic branches were to the tune of Rs2 billion while same at conventional branches stood at Rs13 billion.

Islamic branches, he said, during last calendar year had earned a profit of Rs170 million while the profit of conventional branches during the same period remained at Rs600 million.

Furthermore, he said that State Bank of Pakistan (SBP) the regulator of the banking industry had set up specific criteria under which the banks are required to reach their paid up capital to Rs6 billion by the end of 2009, Rs10 billion by 2010 and Rs15 billion by 2013.