Monday, 21 March 2016

Promoting Islamic banking: Centres of Excellence in educational institutions

LONDON: 
The State Bank of Pakistan (SBP) is pursuing an aggressive policy for the development of adequate human resources for the growing Islamic banking and financial sector in Pakistan.

As part of the plan, in phase 1, three ‘Centres of Excellence’ in ‘Islamic Banking and Finance’ have been set up at the Institute of Business Administration (IBA) Karachi, Lahore University of Management Sciences (LUMS) Lahore and the Institute of Management Sciences Peshawar.
Setting up these centres is indeed an impressive development as it is bringing the most prestigious and professional institutions of higher learning into the fold of Islamic banking and finance. At the same time, the role of more traditional Islamic academic institutions like the International Islamic University Islamabad (IIUI), in developing human resources for Islamic banking and finance industry is getting eclipsed.
The first international conference in Islamic economics, banking and finance was organised by the IIUI in the mid-1980s, and during the following decade the ‘International Institute of Islamic Economics’ at the IIUI provided useful input into delineating a comprehensive blueprint for the Islamisation of Pakistan economy. Now, the IIUI is in a great mess due to the continuous brain drain the university has experienced, with the departure of some of the most distinguished experts in the field of Islamic economies, banking and finance. Last year, the university organised an international conference on Islamic economics and finance but the introvert policy of the university did not help in creating any significant awareness.
Taking the limelight
With an increased focus on Islamic banking and finance and phenomenal growth in the sector, some other institutions have become more visible in the marketplace, most notably COMSATS Institute of Information Technology Lahore. The Centre of Islamic Finance at COMSATS organised its third ‘Global Forum on Islamic Finance’ in Lahore last week, in which delegates and scholars from around the world participated. Prior to that, University of Management & Technology (UMT) Lahore organised a two-day conference on Islamic banking and finance.
LUMS is scheduled to have its first ‘Islamic, Finance, Banking and Business Ethics Global Conference’ on March 27-28, 2016 in collaboration with INCEIF, a Malaysian university specialising in Islamic banking and finance. This would be the third such conference in a span of two months in the city of Lahore. While a welcome development in its own right, it also shows how unsystematic and opportunistic Pakistani institutions are with respect to Islamic banking and finance.
There is a need to devise a collaborative strategy to put Lahore on the global map of Islamic financial services industry. All the three universities in Lahore (namely COMSTAS, UMT and LUMS) should come together to organise something called Lahore Islamic Economic Forum (LIEF). Given the scarcity of human resources and funding for research and development, the three universities should also develop a joint research agenda to conduct applied research in the field of Islamic banking and finance.
Malaysia has developed the World Islamic Economic Forum (WIEF) as a truly global brand and the proposed LIEF should collaborate with it to bring Lahore to the attention of the global Islamic financial services industry.
Punjab, with an estimated population of nearly 100 million, is a viable market for any kind of financial services, including Islamic banking and finance. With the likes of MCB, Allied Bank, the Bank of Punjab, and FINCA Microfinance Bank, headquartered in Lahore, there is enough critical mass to develop Lahore as a centre for Islamic banking.

There are other important institutions headquartered in Lahore, most notably Akhuwat that is a premier microfinance interest-free lender in the country. All these institutions may consider setting up an ‘Islamic Financial Inclusion Centre’ in the city to conduct research in poverty alleviation and reduction of income inequalities in the country.

(The Express Tribune / 21 March 2016)

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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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