Page 11 - CMA Journal (Mar-Apr 2025)

EXCLUSIVE
Exclusive Interview

INTERVIEW

“
To fully transition Pakistan's

financial system to an Islamic model,

it is crucial to implement legal

reforms, establish Shariah-compliant

solutions for deficit financing, create

an Islamic taxation system, and

engage in international collaboration

standardize Islamic trade terms

with other Islamic countries to “
Dr. Mufti Irshad Ahmad Aijaz

Chairman, Shariah Advisory Committee

State Bank of Pakistan (SBP)

ICMA: How do you assess the progress of Islamic ICMA: What are the biggest challenges in

banking and finance in Pakistan over the past decade? transitioning Pakistan’s economy to a fully Islamic
system, and how can they be addressed?
Dr. Mufti Irshad: Over the past decade, Islamic banking
and finance in Pakistan have experienced substantial Dr. Mufti Irshad: Pakistan’s transition to a fully Islamic
growth across multiple areas, including Islamic banking economy faces several key challenges, including the
operations, the conversion of conventional banks, dominance of conventional legal frameworks, limited
Takaful (Islamic insurance), and Islamic mutual funds. legislative backing, and the complex process of
This progress has been facilitated by strong regulatory converting both domestic and international government
support from institutions such as the State Bank of debts to Shariah-compliant alternatives.
Pakistan (SBP) and the Securities and Exchange ICMA: How does the Shariah Advisory Committee
Commission of Pakistan (SECP), both of which (SAC) of SBP ensure that Islamic banking products
introduced Shariah governance frameworks for banking strictly adhere to Shariah principles?
and non-banking financial sectors.
Dr. Mufti Irshad: The Shariah Advisory Committee (SAC)
Notably, the market share of Islamic banking expanded of the State Bank of Pakistan (SBP) is generally
from 11.6% in 2014 to over 24% by 2024, while the responsible for advising on government Sukuk
number of Islamic banking branches grew from structures and addressing issues related to the Islamic
approximately 1,574 to more than 6,000. This impressive banking industry, as presented by SBP’s Islamic Finance
growth reflects a combination of effective regulatory Policy Department. However, the individual products of

backing, continuous innovation in Islamic financial Islamic banks are reviewed and monitored by their
products, and increasing public demand. respective Shariah Boards.
ICMA’s Chartered Management Accountant, Mar-Apr 2025 9