ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has rolled out its Strategic Action Plan 2024-2026 to accelerate the adoption of Islamic finance across all non-bank financial sectors under its jurisdiction. Developed in partnership with key stakeholders, the plan sets an ambitious goal of transitioning regulated sectors entirely to Islamic finance by December 2026, paving the way for a complete shift from conventional financial institutions.
Aligned with Pakistan’s constitutional mandate to eliminate Riba by January 1, 2028, the plan outlines a comprehensive framework to drive the growth, standardization, and legal robustness of Islamic finance while improving its quality.
Four Key Focus Areas:
- Accelerating Growth: Expanding the share of Islamic finance across regulated sectors.
- Promoting Standardization: Ensuring consistency in Islamic financial practices.
- Enhancing Quality: Boosting performance and efficiency in Islamic financial institutions.
- Strengthening Legal Foundations: Building a solid regulatory framework for sustainable development.
This strategy is designed to enable a seamless expansion of Islamic financial institutions, assets, and services in the non-bank financial sector.
Collaborative Development
SECP’s apex committee, led by Commissioner Mujtaba Ahmed Lodhi, spearheaded the plan’s formulation, involving representatives from the Pakistan Stock Exchange (PSX), Central Depository Company (CDC), National Clearing Company of Pakistan Limited (NCCPL), and SECP policy heads. Extensive consultations with Capital Market Infrastructure Institutions (CMIIs) helped identify practical solutions to facilitate a smooth transition to a Riba-free system.
The SECP aims to create a supportive regulatory environment for adopting Islamic finance principles by leveraging the expertise of industry stakeholders.
Next Steps
The SECP will follow the enablement phase with a detailed conversion strategy, ensuring conventional financial institutions can transition smoothly to Islamic systems. By prioritizing minimal disruptions and streamlined integration, the SECP is positioning Pakistan to become a global leader in Islamic finance while fulfilling constitutional and legal obligations.
