Page 12 - CMA Journal (Mar-Apr 2025)

Exclusive Interview

economy through initiatives such as the Shari'ah
The Shariah Advisory Committee Governance Framework (2015), Sukuk issuances, and tax
reforms that incentivize Islamic financial products.
(SAC) of the State Bank of However, further improvements are still required.

Pakistan (SBP) is generally ICMA: What are the essential steps required to fully
transition Pakistan’s system to an Islamic model?
responsible for advising on
Dr. Mufti Irshad: To fully transition Pakistan's financial
government Sukuk structures and system to an Islamic model, it is crucial to implement
legal reforms, establish Shariah-compliant solutions for
addressing issues related to the
deficit financing, create an Islamic taxation system, and
Islamic banking industry engage in international collaboration with other Islamic
countries to standardize Islamic trade terms.
ICMA: How can institutions like ICMA Pakistan
contribute to strengthening Islamic finance?
ICMA: How does SAC collaborate with financial
institutions to improve Islamic banking practices? Dr. Mufti Irshad: ICMA Pakistan, as a local accounting
Dr. Mufti Irshad: The Shariah Advisory Committee (SAC) body, can play a significant role within its scope by
collaborates with financial institutions through the contributing to the development of accounting
Islamic Banking Policy Department (IBPD) of the State
Bank of Pakistan. Any query or request for approval or
opinion from an Islamic bank is routed to the SAC Over the past decade, Pakistan
through the IBPD.
has made significant progress
ICMA: What role do finance professionals, including
accountants, play in advancing Islamic finance? in the Islamization of its
Dr. Mufti Irshad: Finance professionals, including economy through initiatives
accountants, play a vital role in advancing Islamic
finance, as accounting involves the accurate recording of such as the Shari'ah
financial transactions in their true essence. Given the
unique nature of Islamic banking transactions, proper Governance Framework
accounting is essential. The Accounting and Auditing (2015), Sukuk issuances, and
Organization for Islamic Financial Institutions (AAOIFI)
has developed specific accounting standards for the tax reforms that incentivize
Islamic finance industry.
Islamic financial products
ICMA: How can Pakistan’s Islamic banking sector
remain competitive with conventional banking?
Dr. Mufti Irshad: In the true sense, there may not be
direct competition between them, as they offer different standards for Islamic financial transactions in Pakistan.
types of products—Shariah-compliant and Additionally, it can provide specialized training in Islamic
non-compliant. However, as part of the broader financial accounting, promote research on Shariah-compliant
sector, they do operate as competitors. The Islamic financial solutions, and foster collaboration among
banking sector can enhance its competitiveness through industry stakeholders to enhance best practices..
innovation, digitalization, and improved customer service.
The Editorial Board thanks Dr. Mufti Irshad Ahmad Aijaz,
ICMA: What recent government initiatives do you see
Chairman, Shariah Advisory Committee, State Bank of
as most impactful in advancing the Islamization of Pakistan (SBP) for sparing from his precious time to give exclusive
the economy? interview for Chartered Management Accountant Journal.
Dr. Mufti Irshad: Over the past decade, Pakistan has
made significant progress in the Islamization of its

10 ICMA’s Chartered Management Accountant, Mar-Apr 2025