SBP wins IFN global award for 2nd year in a row

KARACHI: Islamic Finance News (IFN), an arm of RED money Group, Malaysia, has announced State Bank of Pakistan (SBP) as the best central bank of 2021 across the world in promoting Islamic finance, a statement said on Thursday.

IFN Best Banks Poll is regarded as a prestigious award in the global Islamic finance space. Bank Negara Malaysia stood second, while the Saudi Central Bank secured third position.

SBP has won this award five times in seven years. Previously, SBP was bestowed with this coveted award for the year 2015, 2017, 2018, and 2020.

IFN in its cover story, while congratulating the SBP for yet another win as the best central bank in promoting Islamic finance stated that they welcome back a leading light of the industry.

“In a closely fought contest, 2020s victor came roaring back to take the crown,” said the IFN. IFN while announcing the poll result also stated that with its Governor, Dr Reza Baqir, recently promoted to be the new chairman of the Council of the IFSB, from his role as the Deputy Chairman in 2021, they can hopefully look forward to even stronger support and leadership from the central bank over the coming year.

The award is an endorsement of its initiatives for promotion of Islamic banking in the country. The award reflects an international recognition of the strategic measures undertaken by SBP to put in place a robust policy environment for Islamic banking to prosper.

SBP has consistently promoted and encouraged Islamic finance within Pakistan, and has taken several significant steps. These include launch of 3rd five year strategic plan for Islamic banking 2021-25, Shariah-compliant standing ceiling facility and open market operations, strengthening of Shariah governance mechanism, Shariah-compliant regulations for the lender of the last resort (LOLR) facility and licensing regime for digital banking covering the Islamic segment.

Besides, the central bank also took initiatives for promoting better awareness amongst the masses, and strengthening international linkages.

Strategic plan 2021-25 envisages taking Islamic banking share of 30 percent in terms of assets and 35 percent in terms of deposits in the overall banking system.

Amidst the Covid-19 chaos throwing unforeseen challenges to the global financial market, Islamic banking industry in Pakistan continued to maintain its impressive growth trajectory and assets and deposits of Islamic banking industry grew on a year-on-year basis by 28.2 percent and 26 percent, respectively by September 30, 2021.

The market share of Islamic banking assets and deposits stood at 17 percent and 18.6 percent, respectively in the overall banking system in the country as of September 30, 2021.

The industry operates through a huge network of 3,651 branches and 1,579 Islamic banking windows (dedicated counters at conventional branches) steered by 22 Islamic Banking Institutions (IBIs) which include 5 full-fledged Islamic banks and 17 conventional banks having dedicated Islamic banking branches and windows.