The 12th session of ‘Leaders at LUMS,’ an initiative by the LUMS Office of Advancement presented numerous interesting insights on Islamic banking in Pakistan. Mr. Azhar Aslam, Head of Islamic Banking and Head of Governance for Central Region, Standard Chartered Bank Pakistan Limited (SCBPL) inspired the audience with his in-depth knowledge on the current statistics of Islamic banking in Pakistan.
Mr. Adeel Hashmi, the moderator of the session, opened the discussion by asking Mr. Aslam the general share of Islamic banking vs. conventional banking within Pakistan. Mr. Aslam, answering the question, informed the audience that Islamic banking essentially started in Pakistan in mid-80s, but was regulated further in early 2001 by the State Bank of Pakistan. He also shared that SCB initiated Islamic banking in 2004, under the name ‘Saadiq’ and Pakistan was its first market. He further elaborated that the expected share of Islamic banking as compared to conventional banking was 5% previously, and has been increasing by 1% every year. Furthermore, the Ministry of Finance and the State bank of Pakistan are also inclined towards Islamic banking, because of which the total share is now 13%. He further mentioned that the Islamic banks were least impacted in the financial crisis of 2007, and thus, investing in Islamic banking proves to be beneficial for us in the longer run. He mentioned some basic statistics about Islamic banking globally, with Saudi Arab comprising of the highest share of Islamic banking at 74% versus 25% for Malaysian market, 22% for the Indonesian market and 19% for the Bangladeshi market.
Discussing the performance of the State Bank of Pakistan (SBP) in comparison to other central banks across the world, Mr. Aslam said that it is one of the best across the globe. He also mentioned that SBP is recognised in Asia, Middle East and Africa, and is only second to Malaysia in terms of being progressive in Islamic banking.
Speaking about his ambitions in life, Mr. Aslam said that banking is imperative for the economic development of Pakistan, and plays a vital role in contributing towards maintaining a circular flow of funds in the country and he wants to make a difference by creating opportunities for different people through Islamic banking. Furthermore, he also advised the young students to realise the importance of giving back to this economy in one way or the other. He mentioned various Corporate Social Responsibility initiatives that SCB has been taking in terms of diversity inclusion as well as his personal involvement with various organisations such as The Citizens Foundation.
The session ended with a note of thanks by the Vice Chancellor LUMS, Dr. Arshad Ahmad, who expressed his gratitude to Mr. Aslam for talking about a profession that has been given less importance in Pakistan, generally. He also thanked the guest speaker for shedding light on the tremendous growth potential within Islamic banking and motivating the students to give back to society.