SBP wins IFN global award for 2nd consecutive year as best Central Bank

SBP wins IFN global award for 2nd consecutive year as best Central Bank in Promoting  Islamic Finance for the Year 2021 

Islamic Finance News (IFN), an arm of RED money Group, Malaysia, has announced State Bank  of Pakistan as the best Central Bank of 2021 across the world in promoting Islamic finance. The  results of global voting were disclosed today. IFN Best Banks Poll is regarded as one of the  prestigious accolades in the global Islamic finance space. Bank Negara Malaysia stood second  while the Saudi Central Bank secured third position. 

The category of the Best Central Bank in promoting Islamic Finance is one of the closely fought  contests among regulators competing for supremacy through exceptional advances made  during the year. SBP is honored to have won this award for the 5th time during last seven years.  Previously, SBP was bestowed with this coveted award for the year 2015, 2017, 2018, and  2020. Governor SBP Dr. Reza Baqir said he was honored to be leading the institution for two  consecutive wins for SBP in Islamic Finance. IFN in its cover story while congratulating State  Bank of Pakistan for yet another win as the Best Central Bank in Promoting Islamic Finance stated that they welcome back a leading light of the industry. In a closely fought contest, 2020’s  victor came roaring back to take the crown, said the IFN. IFN while announcing the poll result  also stated that with its Governor, Dr Reza Baqir, recently promoted to be the new chairman  of the Council of the IFSB, from his role as the Deputy Chairman in 2021, they can hopefully  look forward to even stronger support and leadership from the central bank over the coming  year. 

The IFN Award to SBP as the best central bank is the global endorsement of its initiatives for  promotion of Islamic banking in the country. The award reflects an international recognition  of the strategic measures undertaken by SBP to put in place a robust policy environment for  Islamic banking to prosper.  

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The State Bank of Pakistan has consistently promoted and encouraged Islamic finance within  Pakistan, and has taken several significant steps. These include launch of 3rd five year Strategic  Plan for Islamic banking 2021-25, Shariah compliant standing ceiling facility and open market  operations, strengthening of Shariah governance mechanism, Shariah compliant regulations for  the lender of the last resort (LOLR) facility and licensing regime for digital banking covering the  Islamic segment; besides taking initiatives for promoting better awareness amongst the  masses, and strengthening international linkages. The Strategic plan 2021-25 envisages to take  Islamic banking share of 30% in terms of assets and 35% in terms of deposits in the overall  banking system.  

Amidst the COVID-19 chaos throwing unforeseen challenges to the global financial market,  Islamic banking industry in Pakistan continued to maintain its impressive growth trajectory and  assets and deposits of Islamic banking industry grew on year-on-year basis by 28.2% and 26% respectively by September 30, 2021. The market share of Islamic banking assets and deposits  stood at 17% and 18.6% respectively of the overall banking system in the country as of  September 30, 2021. The industry operates through a huge network of 3,651 branches and  1,579 Islamic banking windows (dedicated counters at conventional branches) steered by  twenty-two (22) Islamic Banking Institutions (IBIs) which include 5 full-fledged Islamic banks  and 17 conventional banks having dedicated Islamic Banking Branches and windows. The  industry is growing on the back of continued support by the Government of Pakistan which  remains committed to provide an enabling platform for this industry to operate.  

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