The federal government on Tuesday issued a notification announcing the constitution of a steering committee that would come up with recommendations in light of the work done so far by various stakeholders for promotion of Islamic banking in the country and implementing a real Shariah-based financial system.
The committee will comprise 10 members, headed by Saeed Ahmad, an actuary and a banker. Other members include Maulana Mufti Muneeb-ur-Rehman, a noted religious scholar, Muhammad Imran Usmani, religious scholar, Dr Waqar Masood Khan, Finance Secretary, Munir Kamal, Afaq Khan, Irfan Siddiqui, Atif Bajwa, Mian Muhammad Idrees, industrialist and Director Islamic Banking Department of State Bank of Pakistan.
The committee, which will have authority to co-opt other members, will submit its recommendations before the end of 2014. The State Bank will provide secretarial support to the committee.
Islamic banking in Pakistan has recorded a reasonable growth and its asset base has grown to Rs1 trillion. However, consumers are still sceptical whether the products of Islamic banks are Riba-based like that of conventional banks or are Riba-free.
The government has also notified terms of reference of the committee. The body will review previous official reports on Islamic banking including the reports prepared by the Council of Islamic Ideology, the Commission for Islamisation of Economy, the Self-Reliance Commission under the Ministry of Planning and a commission of the State Bank in pursuance of the judgment of the Supreme Court of Pakistan.
The committee will also formulate a comprehensive policy framework for Islamic financial system and will suggest practical steps needed to be taken to implement the system. It will try to find out practical ways and means to maximise equity-based financing instead of the widespread debt-based system.
It will suggest solutions for the Islamic secondary market/money market for liquidity management and will chalk out a roadmap and propose a time plan for progress of different phases of Islamic banking.
The committee will also study international implications of converting conventional banking into Shariah-compliant banking. It has been asked to conduct an analysis of the possible legal obstacles to converting conventional banking into Shariah-compliant banking and the changes required to remove these obstacles.
The committee will review the existing research and training facilities in the country for Islamic finance and suggest measures for their reinforcement and new initiatives.
Lastly, under the terms of reference, the committee will chalk out a procedure and process for effective monitoring, overview and supervision of its terms of reference.