and semi urban areas signifies an attractive opportunity for islamic banks. you must be knowing that our survey based research study on islamic banking “ knowledge attitude and practices of islamic banking in pakistan ” identified the potential greenfield growth for islamic banking in the country. this implies that the true potential of islamic banking industry of the country lies in underserved areas / sectors, particularly balochistan, interior sindh, south punjab. however, islamic banking branches are still concentrated in very few regions ; 80 percent of islamic banking branches are concentrated in eighteen big cities only. moreover, at present the share of islamic microfinance is insignificant, though, the inclination of islamic banking institution towards this sector is encouraging. ladies & gentlemen ; there are three challenges to rapid growth for islamic banking : the first is developing new instruments to cover all aspects of banking. we as stakeholders of islamic banking industry should recognize that we cannot move the industry to the next level of growth trajectory unless innovative shariah based solutions for all financial services needs of the clients generally and business community particularly are developed. this highlights the need of research and development to be the core ingredient of the strategy of islamic banking industry. the industry needs to establish knowledge sharing and research platforms to evolve strategies on how best to meet the surging demand for shariah compliant products and services in pakistan. to this end industry can capitalise on strengths and expertise of centres of excellence in islamic finance education that have been established as research incubator and for the capacity building of the industry. moreover, collaboration between academia, shariah scholars and industry professionals can be established through these research centers which will allow synergies along with identifying priority research area. ladies & gentlemen ; the second challenge is capacity building and awareness. the state bank of pakistan, as a regulator performs the role of facilitator for islamic banking industry in the country. in this role, our major focus is on capacity building and awareness raising about islamic banking and finance in the country. to this end we are not only using our training arm, national institute of banking and finance ( nibaf ) for undertaking multiple capacity building programs but have also been page 3 of 4 supportive for such initiatives of industry and academia. while talking about human resource of islamic finance industry, the discussion about role of ulema in promoting islamic banking and finance cannot be ignored. fortunately we are among those countries which are regularly producing good number of shariah scholars with many of those being of international repute. however, with the high growth

for a sparsely populated country, particularly mobile phone payments system. the paper from nepal showed how its banking sector encountered liquidity shortage arising from the slowdown in deposit mobilisation and contraction in forex reserves, and how large flow of credit to real estate reduced the availability of financial resources for productive activities. the paper from sri lanka highlighted the importance of principles based corporate governance norms and consolidated supervision. the paper from india presented the growing interconnected dimension of the financial system and highlighted the significance of systemic risk analysis. the stimulating panel discussion that followed was anchored by mr. t. n. ninan, president, editors ’ guild of india. financial stability in the post crisis period has thrown several unanswered questions. first, the issue of price stability vis - a - vis financial stability. second, the post crisis institutional arrangements for financial stability. third, the challenge of implementing the international regulatory and supervisory reforms by saarc countries with country - specific adaptations. this relates to the basel iii framework, regulation of sifis and otc derivatives markets. fourth, the challenges of micro - prudential supervision in ensuring stability at the systemic level and the importance of macro - prudential policies. fifth, the link between asset prices and financial stability. these are issues on which, as the panel discussion revealed, the search for consensus is on. however, lack of consensus should not be a reason for national authorities not to take country specific decisions. preserving financial stability will continue to be a national priority. during the panel discussion several important points emerged, which included : • the role of confidence in shaping macro - financial conditions ; • post crisis changes in regulatory architecture being driven largely by advanced economies ; • continued relevance of the role of the public sector in the financial sector of the region, particularly infrastructure financing ; • new arrangements on coordination between the government and regulators are yet to be tested ; mr. ninan concluded the panel discussion by emphasising how the discussions helped in improving our understanding of complex issues. let me attempt some specific takeaways from this symposium : first, irrespective of the nature of the mandate – i. e. whether explicit or implicit – central banks will have to assume greater responsibility for financial stability, which in turn may mean multiple and not single objective to conduct of monetary policy. second, crisis prevention frameworks need to be strengthened in every country, but the approach to be adopted requires debate, consultations and coordination. third, given the level of economic development in