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In order to foster the growth of Islamic mutual fund industry, the Securities and Exchange Commission of Pakistan (SECP) has revised the investment parameters for Shariah Compliant open end collective investment schemes. The Commission allowed the Islamic mutual funds to include the Government of Pakistan Ijarah Sukuk not exceeding 90 days remaining maturity in cash and near cash instruments requirement. Shariah Compliant open end collective investments schemes has not seen the issuance of short term Islamic Government papers like T-Bills, therefore, Government Ijarah Sukuk having remaining maturity of 90 days or less is the only viable and available avenue for investment in cash and near cash equivalent.

A new Bank of England consultation, which closes on 29 April, builds on a feasibility study carried out last year and sets out two possible deposit facilities, and two possible liquidity insurance models. The idea behind the proposals is to help firms that are prevented by Shari’a law from undertaking activities involving interest to manage fluctuating liquidity demands and ride out periods of particular stress. Although the consultation sets out options for both Shari’a compliant deposit facilities and liquidity insurance, the Bank of England said that it was prioritising the former as the area of greatest demand. Following the consultation and further analysis, it will decide whether any of the proposals are feasible, it said.

UBL Fund Managers Limited (UBL Funds) announced the launch of the Al-Ameen Islamic Active Allocation Plan–IV, under the Al-Ameen Islamic Financial Planning Fund. This Plan is now open for subscription. The plan actively allocates investments between Islamic equity and Islamic income/money market classes with an aim to achieve potentially high returns. It has a term of two years and is ideal for investors who wish to benefit from the equity market and desire active management of their investment portfolios. Mir Muhammad Ali, Chief Executive UBL Funds, said that the Al-Ameen Islamic Active Allocation Plan series has been well received by investors with initial investments of Al-Ameen Islamic Active Allocation Plans I, II and III totaling more than Rs. 6.3bn.

Silkbank introduced Emaan Islamic Banking through conversion of its seven conventional banking branches into dedicated Islamic Banking branches. In early 2013, three new branches were added to the Islamic Banking network. Emaan Islamic Banking offers a suite of deposit products as well as a range of asset products. The Islamic Banking Division has an alliance with Pak Qatar Family Takaful to provide Takaful & Saving Plans. With the implementation of the SBP Shari’ah Governance Framework and induction of a renowned Shariah scholar, the Islamic Banking Division endeavours to develop Islamic Banking products in Pakistan and serve as a catalyst in Islamic Banking growth in the region. The Bank plans to add 60 new branches in 2016 to the existing network and another 102 branches in the next two years.

Meezan Bank and EFU General Insurance Limited have joined hands for Takaful Coverage of Car Ijarah vehicles. As per the agreement, EFU Takaful will provide coverage to the vehicles leased by Meezan Bank through its Shariah-compliant car financing service Car Ijarah. The MoU was signed by Ariful Islam, Deputy CEO, Meezan Bank and Mr. Hasan Ali Abdullah, Managing Director, EFU General Insurance Limited Window Takaful Operations, at Meezan Bank’s Head Office, Karachi. Irfan Siddiqui, President & CEO of Meezan Bank was also present at the occasion.

Country Director Asian Development Bank (ADB) Werner Leipach, said that ADB was planning to explore opportunities of co-financing from new sources through Islamic Financing and the Asian Infrastructure Investment Bank (AIIB). The AIIB assistance will be sought for the M4 Project, Shorkot-Khanewal Section, near the China Pakistan Economic Corridor. Leipach mentioned that ADB’s total co-financing for Pakistan stood around $1050 million including $400 million grant commitments from DIFD. ADB has also provided trade finance support for the private sector investments to the tune of $95 million.

Under the benefaction of AlHuda Center of Islamic Banking and Economics (AlHuda-CIBE) and Akhuwat, the 5th Global Islamic Microfinance forum (GIMF) was held in Kuala Lumpur, Malaysia. The forum had their focus on financial inclusion, outreach strategies of Islamic Microfinance, Innovation and sustainable operational strategies with emphasis on linkages, institutional support, cross boarder knowledge sharing with practical experiences and donor linkages for the development of the Industry. The Guest of Honor at the Forum, Dr. Azeema Adam, Governor, Maldives Monetary Authority (Central Bank), Maldives, gave detailed overview of Maldives Monetary Authority for the development of Islamic Microfinance and other Islamic Financial components.

Pak-China Joint Chamber of Commerce and Industry (PCJCCI) has called for making the businesses and commercial activities in accordance with Islamic financial laws. The PCJCCI President Shah Faisal Afridi said all stakeholders should understand the limitations at this stage and work towards its advancement to develop an economic system truly reflective of the sacred principles of Islam. According to Global Islamic Finance Report, Pakistan ranked at number nine in the world in terms of development of Islamic financial services industry in the country, and second largest Islamic market (population-wise) after Indonesia, and could become the most important player in Islamic banking and finance, if it attained 20 percent market share.

Banks surpassed the agricultural credit disbursement target set by the SBP’s Agricultural Credit Advisory Committee (ACAC) for the year ending June 2015. Against the indicative target of Rs 500 billion (which was 28 percent higher than the actual agri credit disbursement of Rs.391 billion in FY14), banks disbursed Rs 515.9 billion in FY15, which was Rs 15.9 billion in excess of the target and 31.8 percent higher than the last year’s disbursement of Rs 391.4 billion, said State Bank of Pakistan (SBP) in a statement. Growth was also recorded in the agri outstanding portfolio which stood at Rs 335.2 billion at end June, 2015.

BankIslami Pakistan Limited formally started an Internal Hiring program for former KASB employees to help them assimilate better in the amalgamated entity. While interacting with former KASB employees at the launching ceremony of the Internal Hiring initiative, Mr. Hasan A Bilgrami, CEO BankIslami, reiterated that the Bank shall ensure maximum job security and adjust the staff in internal placements by training them in Islamic Banking as well as other job related skill set.

The State Bank of Pakistan feels that under the current circumstances, merger of KASB Bank with Bank Islami is a viable option wherein the bank’s depositors’ interest would be safeguarded and its problem would be resolved on a sustainable basis. Although there is a possibility of foreign investment worth $100 million from a Chinese investor yet the State Bank is concerned of the safety of depositors’ money and prompt payments to them. At the same time SBP does not want to fall in any conflict with the shareholders. Considering the fact that Chinese investor company called Cybernaut was not able to establish its bonafide even after elapse of considerable time their request was declined on 27th April 2015.

Dr. Hussein Hamed Hassan, Chairman of Shari’a Board for Dubai Islamic Bank (DIB), recently visited Pakistan to meet various Shari’a Scholars, Government Dignitaries, senior Islamic Bankers, State Bank of Pakistan officials, prominent Pakistani businessmen and Dubai Islamic Bank Pakistan (DIBPL) management. Dr. Hussein during his visit held various crucial meetings on Islamic Banking and Shari’a compliance with major stakeholders in the country. He is considered as one of the founding fathers of Islamic finance due to his contribution to developing structures for the day to day running of Islamic banks and financial institutions.

SECP is striving to establish a comprehensive Islamic financial system to cater for the needs of people, which are not inclined to use conventional financial products. The decision of SECP to permit conventional insurance companies to launch Takaful operations will result in rapid development of this sector. However, the development of an Islamic financial system needs to include Islamic banking industry, Takaful industry and Islamic capital and money markets with strong linkages, interdependence and synergies. Although Takaful has been in the market for long, it has yet to make significant inroads as the concept is clouded by unfamiliar terms and principles for commoners resulting in hesitancy. In absence of a viable Islamic capital market the adequate supply of quality financial instruments could be a difficulty.

Al Baraka Bank Pakistan aims to play an active role in social and economic development, by way of contributing to secure the welfare, balance and solidarity of financially and socially challenged segments. Setting the ethical standards for a sustainable society A Group of Volunteers from Al Baraka Bank spent a day, celebrating the Independence Day, with the Children at The Citizens Foundation (TCF) School. Concluding the ceremony, Gift hampers were distributed amongst the attending children. Al Baraka is a sponsor of The Citizen’s Foundation (TCF) Schools. Development of Education sector, through various activities and funding is one of the primary concerns of Al Baraka, in the longer run.

Currently, Pakistan ranks ninth globally terms of development of the Islamic financial services industry but some recent purposeful steps would prove to be a game changer, said Mian Shahid, Chairman United International Group (UIG). Now, the conventional insurance companies in Pakistan are set to make major inroads into the Islamic insurance business with the active support of regulators, he added. The potential of Takaful in the Muslim world is still largely unexploited, he said, adding that its premiums are expected to reach $20 billion by 2017. Saudi Arabia, UAE and Malaysia enjoy the lion’s share on account of their advanced Islamic finance sector while Pakistan would need more simplified regulatory frameworks to propel the industry’s expansion, the insurance veteran observed.

17% of the whole European population live below the poverty line of European countries, a number which is increasing due to the current European financial crisis and unemployment. The major portion of European poverty prevails in eastern European countries where more than 20% people are suffering from poverty. This issue can be addressed through introducing Islamic microfinance in Europe, which not only results in the better financial condition of the poor but also in improved health, education, employment creation, enhanced capacity and long lasting sources of income. In order to strengthen the Islamic microfinance, however, legal and regulatory regimes of Islamic microfinance institutions are needed.

Pakistani Meezan Bank has launched Meezan Kafalah, a Shariah-compliant alternative to Bancassurance, in collaboration with takaful firm Pak Qatar Family Takaful Limited (PQFTL). Meezan Kafalah is a savings product through which customers can save money for their future plans. In addition, the customers also get Free Takaful coverage through PQFTL that in the case of the customer’s death during the savings period, the Takaful Partner will provide the funds needed for completing the savings. This new product, thus, offers a combination of saving, investment and protection. A differentiating feature of Meezan Kafalah is the accumulation of 100% cash value from day one of the investment with flexibility and ease of exit from the plan without any penalty or charges.

Bankers, businessmen and economic experts urged masses to adopt Sharia-based banking and insurance in their need of daily lives and businesses. Speaking at the Second Islamic Financial Expo and Conference (IFEC) held at local hotel on Thursday, they enlightened participants about the potential of Islamic banking, hereafter underlining the need of awareness and penetration of Islamic banking and Takaful services across the country. Islamic banks are very active in introducing different products to the customers which not only meet their demands at commercial and domestic levels but also fulfill Sharia principles. However, there are loopholes in the Islamic banking industry which must be addressed mutually by banks, regulator and the government.

State Bank of Pakistan (SBP) has notified that now un-encumbered Government of Pakistan Ijara Sukuk may be included in the Musharaka Pool (MP), created under the Islamic Export Refinance Scheme (IERS). This inclusion will be subject to the several conditions. All Islamic Banking Institutions (IBIs) shall report Sukuk in MP under the sector heading of GoP Ijara Sukuk. IBIs shall maintain record of Sukuk issue included and the amount of that issue will be incorporated in the MP. The banks are advised to refer to SBP’s Islamic Export Refinance Scheme and other instructions issued from time to time. Other instructions on the subject remain unchanged,

Islamic microfinance can bring people above the poverty line as well as enable self-reliance through a regular source of income. According to Muhammad Zubair Mughal, CEO of AlHuda Centre of Islamic Banking and Economics, adopting Islammmic microfinance can rid Muslim countries of poverty. Non-Muslim countries, however, are currently the leaders in this area. The Centre of Excellence on Islamic Microfinance will start operations simultaneously through its partners offices in other countries in order to contribute to the elimination of poverty through Islamic microfinance.