- go by a certain given deadline. instead, we decided that we should provide a level playing field and afford opportunity for islamic banking to co - exist with conventional banking. we believed that the choice should be left to the individual consumer whether they would like to switch over to islamic banking or stick with their existing banks. the endeavor of the government and the central bank was to ensure that there was no discrimination, preference – overt or convert – policy biases in favour of one system or the other. if, over time, the majority of the consumers decide to opt for islamic banking, the whole system will naturally be transformed and the end point will be reached. in our view, it is not the responsibility of the government or the central bank to impose their will or dictate choices to the people. we have, therefore, opened up the banking system by allowing : ( a ) establishment of stand - alone islamic banks ; ( b ) setting up of subsidiaries of banks for islamic banking ; or ( c ) setting up of full - fledged islamic banking branches of the banks. the initial response has been overwhelming and hundreds of thousands of pakistanis who had never done any banking in their lives are now asking for more islamic banks or branches in their areas. in the very first year, islamic banking segments have captured 1. 6 % of the total assets of the banking system and the rate of growth is extremely fast. in the basis of the current trends, we project that the islamic banks will attain about 10 % of the market share in the next few years. the state bank of pakistan has developed a market - based regulatory framework including a high - powered shari ’ ah board to provide guidance on the shari ’ ah compliance aspects of the business and regulations. the institute of chartered accountants of pakistan ( icap ) has prepared accounting standards for islamic modes of finance which are being implemented. these standards are based on the aaoifi standards and are compatible with the international accounting standards. we have developed innovative products such as islamic export refinance scheme in consultation with the islamic banking industry for it to remain competitive with other banks. despite these positive developments which i have sketched above, i will be remiss in my duties if i do not put forth the enormous challenges in islamic finance and let me tell you there are many. ( a ) fund mobilization : the ways in which islamic banks can and do mobilize funds are all non - conventional and, in some ways, new to the regulators.

##less banking providers achievements in the branchless banking services have already put pakistan at the global centre stage of financial inclusion and innovation. the world bank ’ s consultative group to assist the poor ( cgap ), in one of its studies has also recognized pakistan as one of the fastest growing branchless banking markets in the world, and a laboratory of innovation. we hope that with the entry of new players and scaling - up of the existing institutions the present growth momentum will build up strongly and progressively. before i close, i would like to emphasize on our broader goal i. e. to provide inclusive financial services to poor and low income groups. i firmly believe that microfinance and branchless banking are complementary to each other, and together they will bring the advantages of inclusiveness, convenience, ubiquity, and efficiency. pakistan offers best regulatory framework and industry infrastructure for microfinance, and i hope that our mfbs will take advantage of such a favorable market environment by investing in innovative technologies and products to grow their businesses and expand access to financial services in pakistan. once again, i would like to congratulate waseela microfinance bank limited and mobilink. i wish you every success, assure you of our support, and look forward to positive outcomes of this commercial launch and i hope today ’ s commercial launch of waseela and its branchless banking will go a long way in tackling financial exclusion in pakistan. thank you. bis central bankers ’ speeches