Last week, the National Institute of Banking and Finance (NIBAF) hosted a meeting of the D-8 countries’ central bank experts in Islamabad. Attended by professionals from the D-8 central banks, members of the private sector industry and other officials, the discussion deliberated on capabilities and advancements in promoting financial inclusion and branchless banking as well as Islamic finance in D-8 countries.
Ashraf Mahmood Wathra, the acting governor of the State Bank of Pakistan (SBP), in his speech highlighted that although many of the D-8 central banks have been working on making financial markets more inclusive, financial exclusion remains an impediment to achieving inclusive growth. The acting governor pointed out that financial inclusion should be a top priority and a vital component in a development strategy for both the Islamic and conventional financial sector.
“So far SBP has been pursuing financial inclusion through various policy and market interventions to promote technology-based financial innovations and address market imperfections. However, going forward, SBP is developing a holistic National Financial Inclusion Strategy in collaboration with the World Bank. The national strategy will be developed through a consultative process,” said Ashraf.
One of the notable achievements that took center stage was the significant progress demonstrated by Pakistan since the introduction of Islamic banking in the country. According to the SBP, Islamic banks currently have a 9.6% and 10.4% of the total banking sector assets and liabilities, respectively. Among the suggestions put forward for the advancement of Islamic finance in the D-8 countries is to implement a holistic approach through a strategic plan for the short-term. The plan should determine the future direction of the industry in taking it to the next phase of growth and development.
The D-8 is an organization for development cooperation among eight developing countries namely: Bangladesh, Egypt, Indonesia, Iran, Malaysia, Nigeria, Pakistan and Turkey. The objectives of D-8 Organization for Economic Cooperation include improving all member states’ position in the global economy, diversifying and creating new opportunities in trade relations, enhancing participation in decision-making at an international level and improving standards of living. — NA