Dar says not responsible for IMF deal delay

ISLAMABAD    -    Finance Minister Ish­aq Dar on Monday re­jected the impression that he was responsi­ble for not finalizing the International Monetary Fund (IMF) deal by ask­ing ‘whether Pakistan has defaulted or not’.

“Has Pakistan default­ed?” Pakistan has made all payments on time,” the finance minister re­sponded to the media when a journalist asked him whether the inabil­ity to finalize the agree­ment with the IMF was his failure.

He, however, avoid­ed answering any ques­tions about the IMF and the upcoming budget.

Earlier, addressing the inaugural session of the International Con­ference on Islamic Cap­ital Market, the finance minister re-affirmed the government’s resolve to promote Islamic finance industry and eliminate in­terest-based systems in Pakistan.

He said that we are com­mitted to achieve the goal of this transformation within the timeframe of five years given by the Fed­eral Shariat Court. The size of Islamic Finance Indus­try in Pakistan is estimat­ed to have surpassed forty two billion dollars last year and assets and deposits stand at Rs7.2 trillion and Rs5.2 trillion respective­ly. He said assets of Islam­ic banking industry posted year on year growth of 29 percent in the fiscal year 2022. He said the network of Islamic banking indus­try consists of 22 Islam­ic banking institutions, of these six are full-fledged Islamic banks and sixteen conventional banks having stand-alone Islamic bank­ing branches.

The Finance Minister an­nounced that the National Savings have been directed to launch Shariat compli­ant products for investors. He said the products shall cater to the persistent pub­lic demand for safe invest­ments in line with the prin­ciples of Shariat. He said the products will be in the forms of saving accounts and term accounts of one, three and five years.

Ishaq Dar said the Fi­nance Division has consti­tuted a steering commit­tee for providing strategic guidelines regarding im­plementation of Federal Shariat Court’s judgment on Riba.

“Pakistan has a strate­gic plan in place to grow Islamic finance”, he said adding, “We have a finan­cial inclusion strategy that covers all the components needed to create Islamic fi­nancing”.

In his speech, SBP Gov­ernor Jameel Ahmed said, “We are committed to transforming the financial sector into a Shariah-com­pliant system. To this end, SBP and SECP, as part of the federal government’s steering committee, are playing their roles in achieving the aligned goals for the transformation to­wards an Islamic econom­ic system”.

He added that the main impediments to the growth of Islamic capital markets include gaps in in­stitutional, legal, and regu­latory frameworks; a lack of efficient ways for price formation and discovery; and a lack of diversity in Islamic capital markets in­struments and investors.

He noted that the aim is to eliminate interest from the country’s economy by 2027. “In the past de­cade the country has seen a 24% rise/growth in Is­lamic banking, with the Islamic capital market growing to around $3 tril­lion,” he said.

He added, this has re­flected positively in the overall state of the coun­try’s economy. “Islam­ic banking now makes up 20% of the banking sector in Pakistan.” He said that Pakistan has issued Sukuk bonds (Shariah-compliant bonds) worth Rs2.8 tril­lion. A committee has been formed within the SBP to convert government debt into Sukuk, he informed.

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