Islamic finance important to end economic exploitation: President

He called for focusing on Islamic principles to prevent concentration of wealth in the society.

ISLAMABAD (Dunya News) – President Dr Arif Alvi on Monday said Islamic banking and finance offered a broad-based platform to end economic exploitation and stressed its implementation to uplift underprivileged segments of society.

Addressing at the 10th ceremony of Global Islamic Finance Awards (GIFA) here, the President said fairness, equality, transparency and pursuit of social harmony constituted the principles of Islamic financing. 

The President called for focusing on Islamic principles to prevent concentration of wealth in the society and eliminate exploitation by discouraging elitism.

Dr Alvi said Islamic finance contributed $2.7 trillion globally, however pointed that it was comparatively much less as compared to conventional banking, adding that 17 percent of Pakistan’s banks had turned to Shariah compliant instruments and commended the role of State Bank of Pakistan and also Security Exchange Commission of Pakistan in this regard.

He stressed the need for raising public awareness about Islamic finance, particularly the spirit leading towards its positive impact on society due to far bigger scope than just being limited to money lending.

The President said a justified profit-making and setting a suitable limit to avoid exploitation was a real challenge for banks, adding the coronavirus pandemic posed financial problems worldwide that required adaptations in systems accordingly.

Dr Alvi mentioned that Ehsaas programme launched by the government provided financial assistance to the people during difficult economic situation. He regretted that the world over, morality suffered at the hands of economic interests and mentioned the response of United Nations on several important issues based on same approach.

He urged upon the multi-national companies to think about the notion that profit-making should not be a lone factor in dealings, but welfare of consumers and employees as well. He termed that exploitative financial mechanism prevailing in the country against the spirit of Islam and called for an in-depth deliberation to address the grievances of people.

President Alvi called for keeping in view the factors such as inflation while lending money to consumers, and mentioned the example of China which promoted white money through simplified system based on transparent scientific modules.

"Unless a country cared for its underprivileged and vulnerable, the goals of economic prosperity could not be achieved," he said and added digital economy had prospects of benefitting many segments of society, particularly women and differently-abled persons.

Dr Alvi emphasized on diverting financial instruments towards welfare of society to realize the concept of State of Medina through uplifting the poor.

Governor State Bank of Pakistan Dr Reza Baqir briefed about the government’s framework on Shariah compliance and the related challenges and opportunities available with Islamic financing system.

He mentioned measures adopted by the government in the domain of Islamic finance including representation of three Islamic schools of thought in Shariah Advisory Committee for an inclusive approach, setting up of Shariah boards at banks and mandatory Shariah audit.

He said Islamic banking in the country covered 13 percent of Small and Medium Enterprises and six percent of agriculture sector, which offered immense opportunity to further explore these areas.

Founding Chairman GIFA Dr Hamayun Dar highlighted the salient features of the awards with its role to promote, regulate and supervise the Islamic banking and finance the world over.

Later, President Alvi gave away awards to banks working in Islamic finance for their significant performance in related fields.

Former Governor SBP Dr Shamshad Akhtar, foreign delegations including financial experts and representatives from banks attended the ceremony.