Push to Islamize Pakistani banking sector made possible by Arab investors — experts

People wait for the bank opening in Islamabad on March 24, 2020. (Photo courtesy: AFP/File)
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Updated 30 November 2022
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Push to Islamize Pakistani banking sector made possible by Arab investors — experts

  • Faysal Bank Pakistan gears up to become country’s sixth Islamic commercial bank in January 2023
  • Islamic International Rating Agency has called Faysal Bank’s conversion “first of its scale” globally

KARACHI: Financial experts have said the push to Islamize Pakistan’s banking system was being made possible due to the backing of Arab investors, as Faysal Bank gears up to convert into the country’s sixth Islamic commercial bank in January 2023.

Since Pakistan started shariah-compliant, or interest free, banking in 2002, the overall market share of Islamic banking assets and deposits has grown by 19.5 percent and 20.5 percent respectively up until June 2022. By the end of the fiscal year 2021-22, the deposits of the sector had surged from Rs8 billion to Rs4.85 trillion, according to the State Bank of Pakistan (SBP).

At present, the five full-fledged Islamic banks operating in Pakistan have investors from Saudi Arabia, Bahrain, Kuwait, and the United Arab Emirates (UAE).

Faysal Bank, another conventional bank owned by Prince Amr bin Muhammad bin Faisal Al Saud, the grandson of late Saudi King Faisal, has completed the conversion of all its branches save one, which has been retained for administrative purposes.

The bank’s top officials said this week they were “optimistic” to start the new year as the country’s sixth and second-largest Islamic bank after Meezan Bank, the country’s first Islamic bank and the fifth-largest bank in terms of deposits, according to financial sector data.

“We have completed the conversion process and we have applied to the central bank for the license,” Muhammad Faisal Shaikh, Head of Islamic Banking at Faysal Bank, told Arab News on Monday.

“Starting from January 2023, we will be a full-fledged Islamic bank licensed by the SBP and it is regarded as one of the largest conversions in the financial world.”

The Islamic International Rating Agency (IIRA) has also called the conversion of Faysal Bank the “first of its scale” in the domain of Islamic banking globally.

Industry insiders acknowledge the substantial contribution of Arab investors to the country’s Islamic banking sector, saying the roots of its riba, or interest, free financial sector were based in the Middle Eastern region.

“The contribution of Arab investors is very important in Pakistan,” Shaikh said. “In fact, Islamic banking was introduced by Arab Investors in Pakistan.”

Without funds and expertise from Arab investors, analysts said, the growth of the Islamic financial sector in Pakistan would have been “difficult to achieve.”

“In the growth of Islamic banking, the role played by Arab investors is very crucial,” Ahmed Ali Siddiqui, a director at the Center for Excellence in Islamic Finance (CEIF) at the Institute of Business Administration (IBA), told Arab News.

“They are the pioneers to set up Islamic banking in Pakistan, without their support the current level of growth was much difficult to achieve.”

Earlier this month, the central bank and other commercial banks withdrew their appeals from the Supreme Court challenging directions by the Federal Shariat Court to the government to make the country’s entire banking system shariah-compliant by December 2027.

Siddiqui said the decision would help in the further advancement of the sector.

“As Pakistan moves to complete Islamization of the banking system, more opportunities will emerge for investment in the financial sector,” Siddiqui said. “The continuous support of Arab investors is crucial for growth of Pakistan’s financial sectors.”

"The conversion of Faysal Bank is extremely important from the perspective that it is the first case where a full-fledged bank has been converted into a full fledge commercial Islamic bank," Shaikh added.


Blasts in northwest Pakistan leave 2 dead, 13 wounded including policemen

Updated 14 sec ago
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Blasts in northwest Pakistan leave 2 dead, 13 wounded including policemen

  • First attack targeted a funeral in Azam Warsak, the other was directed against a police van in Bannu
  • Such incidents have surged in recent years, contributing to an atmosphere of heightened insecurity

PESHAWAR: Two people were killed and at least 13 others, including several police personnel, were injured in two separate bomb blasts in northwestern Khyber Pakhtunkhwa (KP) province on Tuesday, police said.
KP, which shares a long and porous border with Afghanistan, has experienced a surge in militant violence in recent years. The region has been targeted by deadly suicide bombings and attacks on both civilians and security forces, contributing to an atmosphere of heightened insecurity.
Police spokesperson in the province, Habib Islam, told Arab News the first explosion occurred in Azam Warsak, a town on the outskirts of Wana, the headquarters of South Waziristan district, as people dispersed from a funeral ceremony.
“The blast left two persons dead and eight others wounded. The explosion was triggered by a remote-controlled device, but it can’t be immediately confirmed who was the target of the attack,” he added.
Soon after the incident, a heavy police contingent rushed to the crime scene to evacuate the dead and wounded to the nearest medical facility.
Dr. Hammad Mehmood, a senior medical practitioner at the DHQ Hospital Wana, said the staff received a total of nine wounded, with two critically injured individuals referred to Dera Ismail Khan for treatment.
The second blast occurred in Bannu district, where a police mobile van was targeted with an improvised explosive device (IED), leaving five policemen injured, a senior police officer, Zahir Nawaz, told Arab News.
“Five policemen were injured in a blast triggered by a device planted in the Mamaskhel area of Bannu district,” he added.
Over 82 policemen have been killed in attacks, ambushes, and targeted killings in KP this year, according to official data.
Such attacks have been on the rise in northwestern Pakistan in recent months, with most being claimed by the banned Tehreek-e-Taliban Pakistan (TTP) militants.
TTP fighters have targeted security forces’ convoys and check posts and carried out targeted killings, as well as kidnappings of law enforcers and government officials.
Earlier this month, two policemen were killed and three injured in an attack on a check post in the province’s Shangla district.
Pakistan has frequently accused neighboring Afghanistan of sheltering and supporting the TTP and other militant groups, urging the administration to prevent its territory from being used by armed factions to launch cross-border attacks.
The Afghan Taliban deny the charge, insisting Pakistan’s security issues are an internal matter.
 


Pakistan forecasts thunderstorms, heavy snowfall in northwest from January 1 to 6

Updated 5 min 43 sec ago
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Pakistan forecasts thunderstorms, heavy snowfall in northwest from January 1 to 6

  • KP’s top PDMA official has asked district administrations to take necessary precautionary measures
  • Pakistan has seen erratic weather patterns recently, with scientists attributing them to climate change

ISLAMABAD: Weather authorities in Pakistan on Tuesday predicted thunderstorms and heavy snowfall in the upper districts of northwestern Khyber Pakhtunkhwa (KP) province from January 1 to 6.

Pakistan has experienced erratic changes in its weather patterns in recent years, which scientists attribute to climate change. This year, the country recorded its “wettest April since 1961,” with 59.3 millimeters of rainfall, while some areas endured deadly heat waves in May and June.

KP’s Provincial Disaster Management Authority (PDMA) forecast rain and snowfall in Chitral, Dir, Swat, Kohistan, Shangla, Battagram, Mansehra, Abbottabad, Haripur, Malakand, Buner, Bajaur, Mohmand, Khyber, Orakzai, Kurram, Waziristan, Peshawar, Charsadda, Nowshera, Swabi, Bannu, Karak and Kohat.

“The forecast indicates that the rain and snowfall will continue from January 1 to 6,” the PDMA said in a statement, adding there was a likelihood of heavy snowfall on mountains from January 1 to 5.

The PDMA has notified all district administrations to undertake precautionary measures and ensure the availability of large and small machines to handle any emergencies.

The public has been advised to avoid power lines, decaying buildings, construction sites and billboards, while farmers have been urged to plan their activities accordingly.

DG PDMA Asfandyar Khattak directed the authorities to remain vigilant in case of any untoward incidents and advised tourists to contact relevant officials before traveling.

“Local administrations in sensitive districts should communicate weather-related messages in local languages to the community,” he added. “In case of any emergency, all relevant agencies should remain alert to restore road links and provide alternative routes for traffic in the event of road closures.”

Meanwhile, PDMA Balochistan said cloudy weather was expected in most districts, with light rain and snowfall likely in Chaman, Kalat, Zhob, Qilla Abdullah, Qilla Saifullah, Pishin, Ziarat and Quetta in the southwestern province.

In 2022, unusually heavy rains triggered floods in many parts of the country, killing over 1,700 people, inflicting economic losses of around $30 billion and affecting at least 30 million people.


Karachi police deploy over 2,400 personnel for New Year’s Eve security at Seaview

Updated 31 December 2024
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Karachi police deploy over 2,400 personnel for New Year’s Eve security at Seaview

  • Youngsters step out on New Year’s Eve across Pakistan, where fatalities from aerial firing are common
  • Karachi police have also deployed intelligence teams, asking them to remain vigilant during celebrations

KARACHI: Police in Pakistan’s southern port city of Karachi on Tuesday announced robust security measures for New Year’s Eve at the popular Seaview area, deploying over 2,400 officers and staff to ensure public safety and maintain order during celebrations, according to an official statement.
Young people traditionally step out to celebrate New Year’s Eve across urban centers in Pakistan, often resulting in road accidents or fatalities from aerial firing. Karachi’s Seaview remains a popular destination for such festivities, where police routinely ramp up precautions.
Amid a surge in street crimes in recent years, Karachi police are also on high alert to prevent potential incidents.
“To maintain law and order, six police platoons will be stationed at Seaview and adjacent areas,” Senior Superintendent Police Mahzur Ali was quoted in the statement as saying. “A total of 2,451 officers and personnel, including intelligence staff, have been deployed around Seaview, where hooliganism or aerial firing will not be tolerated.”
The statement highlighted that the security deployment includes several senior police officials and 80 mobile units along with 106 motorcycle patrols.
Mounted police, a specialized unit of law enforcement officers who patrol on horseback, will also monitor the area. Intelligence teams have been directed to stay vigilant.
The police have further implemented traffic management plans, converting both tracks from Seaview McDonald’s to Khayaban-e-Ittehad into one-way routes to ease congestion.
“No unlawful activities will be permitted,” added Ali.
The police also emphasized their commitment to ensuring a safe environment for citizens to celebrate responsibly.


Former Gilgit-Baltistan chief minister sentenced to 34 years for speech against state institutions

Updated 31 December 2024
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Former Gilgit-Baltistan chief minister sentenced to 34 years for speech against state institutions

  • Muhammad Khalid Khurshid belongs to PTI and has been fined Rs600,000 by the court hearing his case
  • A PTI lawmaker slams the verdict, G-B spokesperson says ‘no one is above the law and the constitution’

KHAPLU, Gilgit-Baltistan: An Anti-Terrorism Court in Pakistan’s northern Gilgit-Baltistan (G-B) on Tuesday sentenced former Chief Minister Muhammad Khalid Khurshid to 34 years in prison and fined him Rs600,000 ($2,154) for delivering provocative speeches against state institutions and inciting public unrest, according to the court judgment.
Khurshid, a prominent member of former Prime Minister Imran Khan’s Pakistan Tehreek-e-Insaf (PTI), which has alleged a sweeping crackdown following Khan’s ouster and imprisonment, was removed as G-B’s chief minister in 2023 over a fake degree scandal.
On July 26, 2024, he was accused of threatening security institutions, including the chief secretary and the election commissioner, during a public rally in Gilgit. He had been evading court hearings since then, leading to his absence during the trial.
The court instructed the region’s police chief to ensure Khurshid’s immediate arrest and transfer to prison. It also ordered the National Database and Registration Authority (NADRA) to block his identity card.
“This is purely a judicial matter,” Faizullah Faraq, G-B’s spokesperson, told Arab News while confirming the verdict. “We won’t comment on it.”
Meanwhile, Col (r) Obaidullah Baig, a PTI member in G-B’s legislative assembly, said his party respected judicial processes but noted that the verdict did not “fully reflect the true circumstances and principles of justice.”
“We are currently evaluating all legal options and discussing the possibility of an appeal to ensure that the rights of the accused are upheld and that a fair trial is conducted,” he told Arab News. “As a matter of fact, the constitution remains suspended in Pakistan and after the controversial 26th amendment, the independence of judiciary in G-B and Pakistan is questionable.”
Baig maintained that the former chief minister had always been an advocate for democratic values, free speech, and peaceful discourse.
“The allegations that his speeches incited violence or undermined state institutions are completely baseless,” he said, adding that Khurshid had only asked the security establishment and intelligence agencies about “their meddling into the region’s political matters” in the context of his government’s downfall.
He maintained that the sentence would only serve to strengthen the ex-chief minister’s resolve and further energize his supporters across G-B and Pakistan.
“It is likely to galvanize his political career, as it highlights the ongoing political struggles and the misuse of state power to target opposition figures,” the PTI lawmaker added.
G-B spokesperson, Faraq, however, emphasized it was important to uphold the rule of law.
“I just want to say that we should respect our state institutions,” he added. “Everyone should follow the law. No one ... is above the law and the constitution.”


Pakistan-origin Sadiq Khan receives knighthood in King’s New Year honors

Updated 31 December 2024
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Pakistan-origin Sadiq Khan receives knighthood in King’s New Year honors

  • Khan grew up in south London as one of eight siblings in a working-class family
  • He calls it ‘the honor of my life to serve the city I love’ in a social media message

ISLAMABAD: London Mayor Sadiq Khan, the son of Pakistani immigrants, has been awarded a knighthood in King Charles’s New Year honors list, recognizing his contributions to public service and leadership in one of the world’s most dynamic cities, according to his social media post on Tuesday.
Khan, who grew up on a council estate in south London as one of eight siblings in a working-class family, faced numerous challenges on his path to becoming the capital’s mayor. His father worked as a bus driver and his mother was a seamstress, instilling in him a strong work ethic and a commitment to social mobility.
A trained lawyer, Khan entered politics as a Labour Party member and has been re-elected as London’s mayor three times, overcoming criticism over crime rates and housing issues in the city.
“Truly humbled to have received a knighthood in the King’s New Year’s Honours,” Khan wrote on X, formerly Twitter. “I couldn’t have dreamed when growing up on a council estate in south London that I’d one day be Mayor of London. It’s the honor of my life to serve the city I love.”
The King’s New Year honors list includes more than 1,200 individuals from various fields, including politics, sports, arts and community service.
Other notable recipients include Gareth Southgate, former England soccer manager, and Keely Hodgkinson, Paris Olympics gold medalist, who were also awarded knighthoods.
The honors, which date back to 1890, aim to celebrate contributions to national life, both from prominent figures and unsung heroes.

With inputs from Reuters