Karachi, December 4, 2024 — Pakistan is positioning itself as a leader in Shariah-compliant financing, with regulatory standards in the country’s capital markets now aligning closely with global benchmarks, according to SECP Chairman Akif Saeed. Highlighting this progress, he announced a 90% compliance rate in Pakistan’s capital markets, including the Pakistan Stock Exchange (PSX), based on an internal assessment. This is a notable improvement from earlier evaluations in 2015 and 2018, which reported 86% compliance with IOSCO principles.
Islamic Financial Services Act in Development
Tariq Naseem, SECP’s Head of Islamic Finance, revealed plans to evaluate adherence to the IFSB principles for Islamic capital markets. This initiative is expected to further elevate Pakistan’s standing in the global Islamic finance industry.
Currently, Shariah-compliant instruments dominate several sectors under SECP’s regulation. These include 55% of PSX’s market capitalization, 48% of mutual fund assets, 65% of voluntary pension fund assets, and 95% of real estate investment trusts (REITs).
Rising Demand for Islamic Financial Solutions
Saeed emphasized the strong demand for Islamic financial instruments, noting that unlisted firms have raised Rs500 billion through Sukuk since 2022. Additionally, the government secured Rs1.5 trillion through sovereign Sukuks listed on the PSX in the past year.
To tackle issues in the secondary market for Shariah-compliant bonds, SECP is working closely with the State Bank of Pakistan (SBP) and the Pakistan Banks’ Association (PBA). Planned reforms aim to increase market transparency, confidentiality, and retail investor participation.
Key Sectors Driving Growth
The agriculture, SME, and housing sectors are driving the demand for Shariah-compliant financial solutions. Pakistan plans to transform its economy to align with Islamic financial principles by 2028. Faisal Bank has already completed its transition to Islamic banking, while other banks and asset management companies are following suit.
Islamic Capital Market Conference 2024
The upcoming Islamic Capital Market conference on December 12 in Karachi will bring together over 20 international experts and policymakers from countries such as Saudi Arabia, Malaysia, Bahrain, and the UK. Organized in partnership with AAOIFI and the IsDBI, the event will strengthen Pakistan’s role in the global Islamic finance ecosystem.
“This conference will reinforce Pakistan’s commitment to ethical and inclusive economic growth,” said Saeed.
Looking Ahead
With strong demand, regulatory advancements, and global collaboration, Pakistan is on track to become a global leader in Shariah-compliant finance, creating a sustainable and equitable financial system.
