‘Islamic banking to help economy’

KARACHI: Country’s banking system switch to Islamic instruments would help strengthen economy as it would lead to a greater financial inclusion of an unbanked population that remains hesitant to be a part of the conventional economic system, a statement said on Saturday.

“This is a great milestone in the financial history of Pakistan. I look forward to the unshackling of the interest-laden debt systems,” said Muhammad Azfar Ahsan, founder of Corporate Pakistan Group and former minister of State and chairman, Board of Investment.

He appreciated an announcement made by the ministry of Finance that the government would drop pleas against an Islamic banking system and switch to Islamic banking in next 5 years.

“With this transformation, Pakistan will be on its way towards an inclusive socio-economic development,” Ahsan said.

The former minister was of the view that interest-laden payments of loans comprise the national growth and lead to unnecessary inflation, closure of businesses, and discouragement of investors.

“Implementation of Islamic Financial Instruments (IFIs) is the best way forward for a country like Pakistan that is crippled by the sheer burden of debt and associated payments that seem to be a permanent feature on the horizon.”

He stated that IFIs posses low risk, high stability, and Shariah compliance features, which could be beneficial for the developing economy of Pakistan.

“The new financial system will evolve into an inclusive and sustainable ecosystem and its core strength of Shariah compliance will ensure progress with prosperity.”

Azfar Ahsan is a strong advocate of Islamic Banking system and has written many articles, showcasing advantages of a Riba-free economy.