Home Weekly Islamic Pages Islamic Banking & Finance Page 20-03-2020

Islamic Banking & Finance Page 20-03-2020

Muhammad Arif : Chairman Centre of Advisory Services for Islamic Banking and Finance (CAIF), Former Head of FSCD SBP, Former Head of Research ArifHabib Investments and Member IFSB Task Force for development of Islamic Money Market, Former Member of Access to Justice Fund Supreme Court of Pakistan

Education in Islamic Banking and Finance

Islamic banking is a kind of banking or financial activity that are consistent with the principles of Islamic law (Shariah) and its practical application is based on Islamic economics. Shariah prohibits the fixed or floating payment or acceptance of specific interest or fees (known as Riba or usury) for loans of money. Investing in businesses contrary to Islamic principles is forbidden in Islamic banking.

The growth of Islamic financial industry has remained remarkable in the last decade in various parts of the world. But with its growth it has gone with shortfall of Human Resources to run its banking. According to a careful estimate more than 50,000 Islamic financial professionals are required for the Islamic Financial industry.

Everyone should be very clear that a person cannot become a reliable Islamic banker just by studying a few books or one week training but it needs many things in collective. To become an Islamic banker, one needs to spend life in this field to gain experience. We do not have enough trained professionals in the field of Islamic banking and finance at the moment. Further we also need to have experienced professional to teach Islamic banking not only in banks but in educational institutions with carrying out research in this area.

Currently, in accordance with a careful approximation, around 40 well reputed Universities all over the world are providing Post Graduate, PhD and Bachelor level programs on Islamic Banking and Finance. These universities are producing approximately 10,000 professional every year while the demand of the Islamic Financial professional are 5 times high. Hence it is an immediate need to bridge the demand and supply gap of the Islamic Financial Industry from this angle. Following approaches and techniques can be:

  • University Degree Programs.
  • Specialized Trainings and Workshops.
  • Distance Learning Programs.
  • Publications, Webinars & other Media.

In Pakistan Islamic banking industry consist of 22 Islamic banking institutions; 5 full-fledged Islamic banks (IBs) and 17 conventional banks having standalone Islamic banking branches (IBBs) with 3,226 branches spread across 120 districts by end December, 2019. The number of Islamic banking windows operated by conventional banks having IBBs stood at 1,373 22 Islamic banking institutions.

To provide Islamic Banking with Knowledgeable staff different Training Program are required to  enhance skills and knowledge base of field staff of Islamic banking institutions particularly Branch Managers (BMs), Operation Managers (OMs), and Relationship Managers (RMs) of Islamic banking industry, academia, students in colleges and universities  and Shariah scholars.

Still Islamic banking around the world and in Pakistan tends to focus more on producing qualified Sharia advisors than grooming people working in treasury or product development departments which is absolutely wrong. Every area has its special features. Hence for developing Islamic Banking along with Sharia Scholars, Bankers, Market Practitioner and Legal Experts all are needed. One must recognize that most credible Islamic Banking experts in the world are non-Muslims as they work to develop the market products by considering all aspects pertaining to market requirements.

Further Intensive use of print media, engaging electronic media has to be tried but it has not been done so far. This is due to the fact that the growth of the Islamic financial industry is creating a mismatch between required and available human resources at different levels of media and at different institutions.

However with these mismatches it also provides an opportunity to use media and academic institutions to design and develop Islamic business programs to meet the requirements of the Islamic financial industry.

Education regarding Islamic finance also ensures a promising career because exponential expansion of the Islamic finance industry in Pakistan and other countries is on surge.

In order to facilitate and provide quality graduates and skilled staff to the industry, and promote Islamic finance education and research, the State Bank of Pakistan has established three centers for excellence in Islamic finance in reputed business schools of the country. These centers are located at the Institute of Management Sciences (IMSciences) Peshawar, at IBA-Karachi and at LUMS Lahore. These centers are providing quality Islamic finance education, training for professionals and awareness about Islamic banking and finance. In Pakistan 208 universities including public and private exist and all are providing courses on Islamic Banking and Finance. Hence it is highly required that these three centers of Excellence should review courses offered by all these universities and particularly focus on curriculum to ensure that these all universities are not short of any area of Islamic Banking and Finance.

These Centers of Excellence are also required to ensure reputed Islamic finance faculties, knowledge creation areas, textbooks with local case studies in Islamic finance and PhD program for their initiation in education of Islamic business and finance.

As an example In Malaysia, the National Sharia Advisory Council has additionally set up at Bank Negara Malaysia (BNM) that advises BNM on the Sharia aspects of the operations of these institutions, as well as on their products and services. In 2006, Bank Negara Malaysia setup International Centre for Education in Islamic Finance (INCEIF) a dedicated University to provide skilled and certified personnel for Islamic Finance in Malaysia. The university was established as part of the Malaysian Government’s initiative to further strengthens the country’s position as an international Islamic finance center. It is the university in the world that has provided first of all wholly dedicated postgraduate study in Islamic Finance.

Centre of Advisory Services for Islamic Banking and Finance with its website (islamicfinancecaif.com) is also carrying out its research activities through is Publications, Webinars & other Media sources to support these efforts. With its book on “Islamic Economics” and Assessment of Islamic Banking and Finance worldwide and Pakistan for the years 2015,2016,2017,2018 (for each year) and with lot of research articles, it is trying to create awareness as well solutions for moving forward in Islamic Banking and Finance. Still SBP has not accepted this kind of technique and approach to support Islamic Banking and Finance in Pakistan that is very much required to accommodate this as an example for other institutions as well. Still SBP focus is to arrange Seminars and shows at five star hotels that is not working well to change the general perception of common people who still consider Islamic Banking and Finance as another face of conventional banking.


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