SBP wins the best central bank for Islamic finance

In a poll by Islamic Finance News (IFN), REDmoney Group Malaysia, the State Bank of Pakistan (SBP) was declared the Best Central Bank for promoting Islamic finance. SBP has won the said poll for the fourth time, making it the second time SBP has won an international award for Islamic banking in the fiscal year 2021. In September 2020, SBP was also honored with the Best Central Bank of the year award by the Global Islamic Finance Awards (GIFA).

“It is always a closely contested battle for the top spot, but 2020 was rather more of a runaway victory than we have seen in recent years. The 2018 winner, the State Bank of Pakistan, achieved a decisive win with almost three-quarters of the votes,” announced Islamic Finance News (IFN). SBP made history by receiving the highest number of votes in IFN’s 16 years history, despite the ongoing Covid-19 global pandemic, IFN added further.

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The Islamic banking sector’s growth had remained stable throughout 2020. It contributed around 16.0 and 17.3 percent to the country’s whole banking industry’s assets and deposits respectively. As of September 2020, the Islamic banking sector had 3,303 branches in 122 districts across Pakistan.

SBP has long been committed to promoting an environment where there is increased financial inclusion along with Islamic banking. The National Financial Inclusion Strategy (NFIS) of the Government of Pakistan has also made Islamic banking an important component to facilitate people who are underserved or voluntarily excluded because of their faith or just those who simply prefer Islamic banking. The NFIS of 2023 has set a target of 25 percent as Islamic banking’s market share in the overall banking sector.

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Sticking true to its aforementioned commitment, it had formulated three Shariah-compliance Islamic refinance schemes last year, keeping in view the ongoing global pandemic. The themes included the Islamic Temporary Economic Refinance Facility (TERF), Rozgar Scheme; for the payment of salaries and wages to employees and workers; and the Islamic Refinance Facility for Combating Covid-19 (IRFCC).

These schemes were launched to facilities people who prefer Islamic banking facilities to benefit from them and help curb the negative effects of the Covid-19 pandemic.

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In another historic achievement, the State bank of Pakistan inaugurated Shariah-compliance Islamic Naya Pakistan Certificates under Roshan Digital Account for Pakistanis living overseas. It has also released guidelines for Development Finance Institutions to take on Shariah-compliant business.

The State Bank of Pakistan’s commitment to facilitate the growth of Islamic banking in Pakistan is reflected in its international recognition through several international awards and being honored by the IFN awards of the Best Central Bank four times since 2015.

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