governor title date event venue - : mr. tariq bajwa : governor sbp ’ s address to the launching ceremony of aaoifi shariah standards – urdu version : december 12, 2018 : launching ceremony of aaoifi shariah standards – urdu version : marriott hotel karachi. shaikh ebrahim bin khalifa al khalifa, chairman, accounting and auditing organization for islamic financial institutions ( aaoifi ) - mufti taqi usmani, chairman shariah board, aaoifi - distinguished speakers, ladies and gentlemen assalam - o - alaikum and good morning! i feel honored to be here on this important occasion of launch of urdu version of aaoifi ’ s shariah standards. we are all aware that national language is an important ingredient of any culture and most effective mode of communication in a country. with this in perspective, translation of global standards into our national language is an important milestone, as it would remove language barriers to understand shariah standards. i believe this urdu version of the shariah standards will be instrumental in improving awareness about islamic finance especially amongst the shariah scholars, academia and practitioners of islamic finance. the scholars and all other experts involved in this project deserve great appreciation for their commendable role. as we are all aware, islamic finance industry is relatively new to the global financial landscape. events like these are important not only for dissemination and awareness but also reinforce the emerging significance of fast growing islamic finance. page 1 of 6 ladies & gentlemen! islamic banking started initially as a niche market for the faith sensitive clientele and is now increasingly becoming an integral component of global financial system. islamic finance industry has grown at a fast pace. the development of islamic banking industry especially beyond muslim jurisdictions is a recognition of its viability as a competitive alternate to the conventional banking. according to financial stability report 2018 issued by islamic financial services board ( ifsb ), its asset base has grown by 8. 3 percent to surpass us $ 2 trillion mark. with expanding scope and size of islamic finance, and emerging global challenges, it is gaining importance from financial stability perspective. inherent strengths of being asset backed and prohibition on speculative activities in islamic finance lead to better resilience of islamic banking institutions against excessive risks. however, these strengths alone may not be sufficient to immunize the islamic finance from risks associated with deficiencies in due diligence, inadequate buffers, lack of transparency and weak risk management practices.

owing to factors like dearth of shariah compliant investment opportunities, limited availability of shariah compliant money market instruments and absence of shariah compliant sbp standing facility. in pakistan, sovereign sukuk being issued since 2008 provide the key liquidity management avenue to the domestic industry, however, demand for such instruments far surpasses their supply. being cognizant of this challenge, sbp, in consultation with industry is working to develop alternate solutions for liquidity management for islamic banking industry. the inherent advantage of islamic financial industry to fund projects on equity participation and profit sharing basis enables it to cater to the huge, unmet demands of underserved sectors such as agriculture and smes. however, like conventional industry, islamic banks are also not effectively serving these sectors. kap ( knowledge, attitude and practices of page 3 of 6 islamic banking in pakistan ) survey based study of sbp, also indicates these areas as potential growth avenues for islamic banking industry. sbp is persuading the industry to capitalize on its innate strengths to cater to the needs of these underserved sectors. housing finance is another attractive avenue for islamic banks. increased focus of incumbent government on this sector provides islamic banks an opportunity to diversify their asset portfolio. i am confident that present conducive environment provides opportunity to islamic banking industry to tap potential in low income housing through diminishing musharaka instruments. this would also pave the way towards the ultimate objective of islamic finance. i. e. maqasid - e - shariah. another major issue restraining islamic banking from realizing its true potential is lack of qualified and trained islamic bankers. to tackle this issue, sbp is not only offering training courses on its own and through its training subsidiary - national institute of banking and finance ( nibaf ), but is also supporting industry in such initiatives. we have also collaborated and sponsored three centers of excellence in islamic finance education ( ceifes ) at well renowned educational institutions - iba karachi, lums lahore, and im sciences peshawar. these institutions are fully operational and they are providing regular supply of trained human resource as well as conducting training programs for enhancing capacity of the existing human resource of the industry. another important challenge for the islamic finance industry, as identified in the kap study, is lack of awareness among masses on demand side. as such a robust awareness campaign about islamic banking is necessary for promoting islamic banking. sbp is focusing on addressing