ALHUDA CENTRE OF ISLAMIC BANKING & ECONOMICS

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ALHUDA CENTRE OF ISLAMIC BANKING ECONOMICS

• Event

3rd International Conference Exhibition
Focus
Islamic Banking Takaful
Topic
Islamic Banking in Pakistan A Review
PRESENTATION BY
Prof. Dr. Khawaja Amjad Saeed
Founder Principal, Hailey College of Banking
Finance, University of the Punjab, Lahore
Pakistan (2003----), Member Governing Council,
International Federation of Accountants (IFAC),
New York (1997-2000), President, South Asian
Federation of Accountants (SAFA) (1997),
President, Institute of Cost and Management
Accountants of Pakistan (1997-2000), President,
Association of Management Development
Institutions of South Asia (AMDISA) (1993-96),
Pro Vice-Chancellor University of the Punjab,
Lahore (1994-1996), Founder Director, Institute
of Business Administration (IBA), University of
the Punjab, Lahore (1973-1996).
Venue Date
Islamabad, November 02, 2009
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WELCOME TO OUR PROGRAM

• PRESENTATION FRAME

• Vision and Mission for Central Bank and its
  Islamic Banking Department
• Strategy for Islamic Banking in Pakistan
• Historical Rundown
• Quantitative Analysis
• Future Outlook

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SOURCES

• State Bank of Pakistan Annual Report 2008-09,
  Karachi SBP, P. 42.
• Frequently Asked Questions (FAQs) on Islamic
  Banking, Karachi SBP-Islamic Banking Department,
  February 23, 2009, PP 1-35.
• Pakistans Islamic Banking Review 2003-2007,
  Karachi, SBP Islamic Banking Department, PP1-77.
• Strategic Plan for Islamic Banking Industry of
  Pakistan, SBP Islamic Banking Department, N.D,
  PP 1-57.
• Risk Management Guidelines for Islamic Banking
  Institutions, Karachi, SBP-Islamic Banking
  Department, January 02, 2008, PP 1-19.
• Islamic Banking Bulletin Karachi SBPL Islamic
  Banking Department, June 2008.
• Islamic Finance Opportunities and Challenges
  Karachi, SBP A Collection of Speeches by
  Governor SBP from 2006-2008 PP 1-37.

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A PAKISTAN VISION MISSIONFOR CENTRAL BANK
AND ITS ISLAMIC BANKING DEPARTMENT
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A PAKISTAN VISION MISSIONFOR CENTRAL BANK
AND ITS ISLAMIC BANKING DEPARTMENT
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B PAKISTAN SBP STRATEGY FOR ISLAMIC BANKING

• THREE PRONGED
• Full fledged Islamic Banks in Pakistan Sector
• Conventional Banks to set up
• (a) Islamic Banking subsidiaries
• (b) Stand alone Islamic Banking Branches

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C PAKISTAN ISLAMIC BANKING HISTORICAL RUNDOWN

• 1. PAKISTAN
• Created out of Islamic Ideology
• 2. QUAID-E-AZAM
• Inaugural Speech of SBP of July 01, 1948
• 3. CONSTITUTION OF PAKISTAN
• Article 38 (f)
• The state shall-----eliminate riba as early as
  possible.
• 4. Inretrospect
• 1970s - Efforts started to eliminate riba.
• 1980s - Bold and comprehensive initiative.
• - Pakistan among three countries in the
  world for interest free banking.

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C PAKISTAN ISLAMIC BANKING HISTORICAL RUNDOWN

• 4. Inretrospect
• 1980s - Review of Laws
• - SBP Act
• - Companies Ordinance 1984
• - Recovery Laws
• - Negotiable Instrument Act
• - June 26, 1980 PTC-New Interest free
  instrument of corporate financing
• - NIB-12 modes
• - January 01, 1981, separate interest free
  counters
• - July 01, 1982-Musharaka for working
  capital needs of trade industry
• - April 01, 1985-profit loss sharing basis.

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C PAKISTAN ISLAMIC BANKING HISTORICAL RUNDOWN

• 4. Inretrospect
• 1990s - Federal Shariat Court November 1991
• - December 23, 1991
• Laws involving interest would cease to
  have effect finally by June 30, 2001
• 2000s - January 2000, Commission for
  Transformation of Financial System
  constituted in SBP
• - Task force set up to suggest ways to
  eliminate interest from govt financial
  transactions
• - Conclusion-Parallel Banking system

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D QUANTITATIVE ANALYSIS

• 1. Islamic Banking-Year wise entry
• 2. Islamic Banking Industry Progress
• 3. Islamic Banking Industry Progress
• - Selected Indicators
• 4. Trends in Islamic Banking

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D1 PAKISTAN ISLAMIC BANKING YEAR WISE ENTRY
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D2 PAKISTAN ISLAMIC BANKING INDUSTRY PROGRESS
D E C E M B E R NUMBER
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D3 PAKISTAN ISLAMIC BANKING INDUSTRY PROGRESS
SELECTED INDICATORS
DECEMBER GROWTH PERCENTAGE
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D4 PAKISTAN TRENDS IN ISLAMIC BANKING
BILLION RUPEES

• Source Edited from SBP Report 2008-09, P. 43.

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E PAKISTAN ISLAMIC BANKING FUTURE OUTLOOK

• 1. Forecast
• 2012
• Total Assets of Islamic Banking Industry Rs.
  1Trillion
• 1200 branches in 5 years
• Deposits Rs. 1 Trillion
• 12 share of total banking industry
• 2. Challenge/Opportunities
• 15,000 people needed in next 5 years
• Shariah compliant financial services
• Increased interest from GCC investors
• SME, micro finance, agriculture
• Demonstrate growth with profitability
• Differenciated products

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THANK YOU FOR ATTENTIVE LISTENING ASK ANY
QUESTIONS