Global Islamic finance company AAOIFI to work with Pakistan to develop Shariah-compliant capital market

A vendor selling stones waits for customers at a market in Lahore, Pakistan, on May 29, 2023. (AFP)
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Updated 30 May 2023
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Global Islamic finance company AAOIFI to work with Pakistan to develop Shariah-compliant capital market

  • Development comes day after Pakistan organized an inaugural Islamic Capital Markets Conference
  • The country has second-largest Muslim population in the world with very low banking penetration

ISLAMABAD: A leading Bahrain-based international non-profit, aimed at developing the global Islamic finance industry, has showed interest in enhancing collaboration with Pakistan on promoting the Islamic capital market in the South Asian country, the Pakistani finance ministry said on Tuesday, a day after the inaugural Islamic Capital Markets (ICM) Conference in Islamabad.

The conference was jointly organized by the Securities and Exchange Commission of Pakistan (SECP) and the Accounting & Auditing Organization for Islamic Financial Institutions (AAOIFI), the Bahraini firm responsible for the development and issuance of standards in the areas of Shariah, accounting, auditing, ethics and governance for international Islamic finance globally.

On Tuesday, Sheikh Ebrahim Bin Khalifa Al-Khalifa, who is the chairman of the AAOIFI Board of Trustees, held a meeting with Pakistan's Finance Minister Ishaq Dar in the Pakistani capital and exchanged views with him on mutual collaboration in the field of Islamic finance.

The two figures discussed "enhancing mutual collaboration with Pakistan in social welfare, business & financial sectors," the Pakistani finance ministry said in a statement.

"And promoting Islamic finance industry and capital market in Pakistan."

Pakistan has the second-largest Muslim population in the world with very low banking penetration. The government seeks to increase financial inclusion through promoting Islamic finance, as part of the National Financial Inclusion Strategy. Only 21 percent of the adult population had a bank account in 2017, with 13 percent of adults citing religious reasons for not having them, according to the World Bank.

The SECP and AAOIFI also signed an agreement at the conference for joint cooperation in areas of “common interest” that would support the development of the Islamic banking and finance industry.

In 2021, the government set a target of increasing the share of Shariah-compliant instruments in government securities to at least 10 percent by the end of 2022-2023. There are 22 Islamic banking institutions currently operating across the country.

The assets of Pakistan’s Islamic banking industry had posted a year-on-year growth of 29 percent in fiscal year 2022, Dar said as he addressed the ICM Conference on Monday.


Pakistan’s disaster management authority urges citizens to exercise caution as heavy rains loom

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Pakistan’s disaster management authority urges citizens to exercise caution as heavy rains loom

  • Pakistan’s NDMA says heavy rains expected in KP, Balochistan, Gilgit-Baltistan and Azad Kashmir from Apr. 25-30
  • Disaster management authority warns administrations to prepare for emergencies in vulnerable areas from Apr. 25-30

ISLAMABAD: Pakistan’s National Disaster Management Authority (NDMA) on Wednesday cautioned citizens in Khyber Pakhtunkhwa, Balochistan, Azad Kashmir and Gilgit-Baltistan areas against rising water levels, as it braces for heavy rains in various parts of the country from Apr. 25-30. 

A westerly wave from Apr. 25-30 is expected to bring “significant” rainfall and thunderstorms in Balochistan, KP, the northern Gilgit-Baltistan region, and Azad Kashmir, the NDMA said. 

The disaster management authority said these areas are expected to face heavy to moderate rains, windstorms, and hailstorms while it was expected to snow over high mountains.

“Residents near riverbanks and nullahs should be aware of rising water levels and evacuate if necessary,” the NDMA said. “Citizens are urged to exercise caution, avoid weak structures and waterways, and stay updated on weather conditions.”

It also urged farmers, livestock owners, tourists, and travelers to take protective measures for their safety and properties. 

The NDMA urged authorities to prepare for potential floods and landslides, especially in upper KP, Murree, Galyat, Azad Kashmir, and GB. 

“Authorities should ensure readiness to respond to emergencies, with machinery and staff pre-positioned in vulnerable areas,” it added. 

A spell of heavy rains from April 12-21 in Pakistan’s Punjab, Balochistan and KP killed over 90 people, destroying property and farmlands. Experts say the country is experiencing heavier rains than normal in April because of climate change effects.

In 2022, downpours swelled rivers and at one point flooded a third of Pakistan, killing 1,739 people. The floods also caused $30 billion in damages, from which Pakistan is still trying to rebuild.

Pakistan consistently ranks among the world’s worst-affected countries due to climate change. 


PM Sharif on maiden visit to Karachi since assuming Pakistan’s premiership

Updated 24 April 2024
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PM Sharif on maiden visit to Karachi since assuming Pakistan’s premiership

  • Pakistan’s prime minister discusses financial and administrative matters with Sindh governor, chief minister
  • Sharif announces additional 150 buses for Karachi, describes city’s business community as Pakistan’s “backbone“

KARACHI: Prime Minister Shehbaz Sharif arrived in Pakistan’s financial hub Karachi on Wednesday on his maiden trip to the city since assuming the top political office, where he held meetings with the provincial leadership and the business community. 

Sharif, who is in Karachi for a day-long visit, visited the mausoleum of Muhammad Ali Jinnah, Pakistan’s founder, to pay his respects after arriving in the city. 

“The prime minister will exchange views with the governor of Sindh and its chief minister on Sindh province’s overall political situation and administration matters,” a statement from Sharif’s office said. 

Sharif presided over a meeting at the Chief Minister House later in which he was informed about the financial matters between the center and the province. 

The chief minister’s spokesperson informed Sharif that the center owed Sindh a whopping Rs1,078.198 billion yet it had handed over Rs28 billion less than that.

“The prime minister instructed the federal finance minister to speak to the chief minister and resolve financial matters,” the chief minister said.

Sharif later announced the addition of 150 buses in Karachi to a fleet of 300, which the provincial government aims to deploy to alleviate the people’s transport woes.

“On the insistence of transport minister, Sharjeel Inaam Memon, prime minister announced 150 buses in the pool of 300 buses,” Abdul Rasheed Channa, the Chief Minister’s House spokesperson said, adding that the prime minister praised the provincial transport department.

Karachi, one of the largest cities in the world with a population of 20.3 million people, has 25,000 buses operating on over 700 routes covering the city. The number of private buses has decreased to 300 which operate on only 50 routes. 

The prime minister later spoke to Karachi’s prominent businesspersons, referring to them as “the backbone of Pakistan’s economy.”

“We should rise before our personal likes and dislikes to serve Pakistan,” he said, adding that he wanted to carve out the best business policies for Pakistan to improve the country’s financial health. 


Pakistan trains hundreds of volunteers ahead of annual Hajj pilgrimage

Updated 24 April 2024
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Pakistan trains hundreds of volunteers ahead of annual Hajj pilgrimage

  • Hajj is one of the five pillars of Islam and every adult Muslim is required to undertake it at least once in their lifetime
  • Islamabad is to begin its Hajj flight operation from May 9 that would conclude on June 9 and facilitate over 63,000 pilgrims

ISLAMABAD: The Pakistani government has started training hundreds of volunteers ahead of the annual Hajj pilgrimage to help thousands of pilgrims overcome language barrier and other challenges in Saudi Arabia, besides imparting training to intending pilgrims on how to perform Hajj rituals.

Pakistan has a Hajj quota of 179,210 pilgrims this year. Of them, 63,805 pilgrims will be performing the pilgrimage under the government scheme, while the rest would be accommodated by private tour operators, according to the Pakistani religious affairs ministry. The South Asian country is set to start its Hajj flight operation on May 9, which would conclude on June 9.

The ministry conducts training of Hajj assistants and pilgrims every year ahead of their departure to Saudi Arabia to make sure the whole process, including their food, transportation and accommodation, is managed efficiently. This year, Pakistan will be sending 550 Hajj assistants and 400 doctors and paramedical staff to Saudi Arabia to facilitate the pilgrims.

“The training programs are currently underway at district and tehsil level and Islamabad is one of them,” Noor Muhammad Soomro, a deputy director at the Hajj directorate in Islamabad, told Arab News.

“Ministry of Religious Affairs has made very good arrangements for the pilgrims, and this includes Pak Hajj app. If a pilgrim uses the Pak Hajj app, he gets all the details, including training, vaccination, maps.”

Volunteers participating in the Pakistani mission of this year's Hajj are seen attending a training session in Islamabad, Pakistan on April 23, 2024. (AN photo)

Soomro said each Pakistani pilgrim would be provided with a SIM card having 7GB data to connect with their families back home.

“This time, we will provide the train facility to all those pilgrims who travel to Saudi Arabia on the government scheme in Mina, Arafat and Muzdalifah,” he said.

Hajj is an annual Islamic pilgrimage that has been in practice for over 1,400 years. It is one of the five pillars of Islam and requires every adult Muslim to undertake the journey to the holy Islamic sites in Makkah at least once in their lifetime if they are financially and physically able. This year’s pilgrimage is expected to run from June 14 till June 19.

Instructors have been training Hajj assistants and intending pilgrims at a sprawling auditorium at the Islamabad Hajji Camp, where they can also visit different stalls to purchase Hajj items like Ihram, umbrella and towels.

“This training is basically the introduction of the duties of Hajj,” Sanober Khaliq Baloch, a Hajj assistant, told Arab News. “Hajj assistants would be performing those duties for example the induction [of the pilgrims], the transport, the food and obviously about Mina map, a little about the roads and traveling, all these things.”

Speaking about the potential challenges, she said the temperature difference and up to 14 hours of duty could be “daunting,” but she was determined to facilitate the pilgrims in all possible way.

Faisal Hafeez, another Hajj assistant, said he was committed to serve the pilgrims well by taking care of their food, accommodation and transportation.

“Different problems that confront the pilgrims have been discussed here [during the training] and how we are supposed to deal with them and solve the problems,” he told Arab News.

Syeda Munir, who is going to perform Hajj for the first time, praised the training sessions, saying this would help them smoothly perform all rituals.

“This is my third [training] session,” she told Arab News. “They guide us well about how to perform Umrah and Hajj.”


Pakistan and Iran call on UN Security Council to curb Israel’s hostile behavior in Middle East

Updated 24 April 2024
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Pakistan and Iran call on UN Security Council to curb Israel’s hostile behavior in Middle East

  • The two countries issued a joint statement after Iranian President Ebrahim Raisi wrapped up three-day visit to Pakistan
  • Pakistan and Iran agree to adopt a collaborative approach to confront militant violence through institutional mechanism

ISLAMABAD: Pakistan and Iran urged the United Nations Security Council in a joint statement issued on Wednesday to prevent Israel’s hostile acts toward regional countries, noting that the behavior of Prime Minister Benjamin Netanyahu’s administration was further escalating tensions in the Middle East.

The joint statement was circulated by Pakistan’s foreign ministry after Iranian President Ebrahim Raisi concluded his three-day visit to the South Asian state in which he held several high-level meetings in Islamabad, Lahore and Karachi.

The Iranian president arrived in Pakistan on Monday as the two Muslim neighbors sought to mend ties after unprecedented tit-for-tat military strikes earlier this year. The visit also took place at a time when tensions remain high in the Middle East after Iran launched airstrikes on Israel a week ago and Israel retaliated with its own attack on Friday.

The joint Pakistan-Iran statement condemned Israel’s attack on the Iranian Embassy in Damascus on April 2, calling it an unacceptable violation of the sovereignty of Syria that undermined its stability and security. It also pointed out the attack was a violation of international law and the UN Charter, constituting an illegal act under the Vienna Convention on Diplomatic Relations of 1961.

“Recognizing that the irresponsible act of the Israeli regime forces was a major escalation in an already volatile region, both sides called on the UN Security Council to prevent Israel regime from its adventurism in the region and its illegal acts attacking its neighbours and targeting foreign diplomatic facilities,” the statement noted.

It added the two sides condemned Israel’s aggression against the Palestinian people, along with the inhumane blockade of Gaza, while seeking a just, comprehensive and durable solution to the issue based on the aspirations of the people of Palestine.

Pakistan and Iran agreed to adopt a collaborative approach to confront militant violence and to leverage the existing bilateral institutional mechanisms to effectively combat and counter the threat, while fully upholding the principles of the UN Charter, particularly the principles of sovereignty and territorial integrity of member states.

“Both sides also acknowledged the key role of enhanced economic and commercial opportunities in improving the security environment in the border areas,” the joint statement added.

It mentioned the consensus to fully operationalize barter trade mechanisms between the two countries to facilitate bilateral economic and commercial activities.

Both countries reiterated the importance of cooperation in the energy domain, including trade in electricity, power transmission lines and Iran-Pakistan (IP) gas pipeline project.

“The two leaders agreed to boost their bilateral trade to USD10 billion over the next five years,” the statement said.


Global airline body calls for release of $720 million in held revenues by Pakistan, Bangladesh

Updated 24 April 2024
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Global airline body calls for release of $720 million in held revenues by Pakistan, Bangladesh

  • IATA asks Pakistan in a statement to simplify the ‘onerous’ repatriation process causing ‘unnecessary delays’
  • The international organization says airlines are unable to repatriate $399 million from the Pakistani market alone

KARACHI: The International Air Transport Association (IATA) on Wednesday asked Pakistan and Bangladesh to release airline revenues amounting to $720 million, saying the two countries were holding it in contravention of international agreements.

IATA, an international organization representing the global airline industry, asked Pakistan to simplify the “onerous” repatriation process involving audit and tax exemption certificates in a statement, pointing out such procedures caused “unnecessary delays.”

Bangladesh, it said, had a more standardized system, though aviation needed to be a higher central bank priority to facilitate access to foreign exchange.

“The situation has become severe with airlines unable to repatriate over $720 million ($399 million in Pakistan and $323 million in Bangladesh) of revenues earned in these markets,” the statement informed.

IATA’s regional vice president for Asia-Pacific Philip Goh emphasized that the timely repatriation of revenues to different countries was critical for payment of dollar denominated expenses such as lease agreements, spare parts, overflight fees and fuel.

“Delaying repatriation contravenes international obligations written into bilateral agreements and increases exchange rate risks for airlines,” he said. “Pakistan and Bangladesh must release the more than $720 million that they are blocking with immediate effect so that airlines can continue to efficiently provide the air connectivity on which both these economies rely.”

Goh maintained that his organization recognized the two governments were facing difficult challenges, making it necessary for them to determine how to utilize foreign currencies strategically.

“Airlines operate on razor-thin margins,” he continued. “They need to prioritize the markets they serve based on the confidence they have in being able to pay their expenses with revenues that are remitted in a timely and efficient fashion.”

He pointed out reduced air connectivity limited the potential for economic growth, foreign investment and exports, adding such large sums of money involved in the Pakistani and Bangladeshi markets necessitated urgent solutions.