Shaukat Tarin believes Islamic banking system can reduce poverty

Prime Minister’s Finance and Income Advisor Shaukat Tarin on Tuesday highlighted the main components of Islamic banking and said Islamic finance is one of the fastest growing sectors in the global financial system. He said this while addressing the 10th Islamic Finance Exhibition and Conference.

The theme of the conference was The New Normal-Digital Transformation and Islamic Economy and was hosted by The Professional Network and IBA-CEIF, according to a press release published here. Shaukat Tarin said it has become an effective tool for financing development around the world, including in non-Muslim countries. It promotes risk sharing, links the financial sector to the real economy and emphasizes financial inclusion and social well-being.

The sustainable development of Islamic finance offers benefits for economic growth, poverty reduction and promotion of shared prosperity, he added. He believed that through directed instruments, such as Zakah, Sadaqat, Waqf and Qard-al-Hassan, the interest-free system creates an efficient redistribution of wealth in society.

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The advisor said Islamic finance has a lot in common with environmental, social and governance (ESG) goals and has appeal far beyond the Muslim public. Structured around risk sharing and interest avoidance, Islamic finance helps reduce poverty, expand access to finance, develop the financial sector, and strengthen stability and resilience.

Tarin stressed that the Islamic finance industry must strive to become an outward-looking industry – with global appeal transcending borders – that presents unique solutions to real-world problems.

“The economic principles taught by the Quran and the Sunnah of the Prophet (peace_be_upon_him) provide a useful guide in solving the major economic problems facing the world today. No risk, no gain is the basic legal principle of Sharia and a normative rule of justice, ”he added.

Islamic banking can bring positive change

Tarin underlined the fundamental principles of Islam which place immense weight on inclusion, social justice and sharing of resources. A system without Riba therefore includes the elements of the development of the real economy, social justice, transparency, equity and property rights; right to profit – with sharing of risks and rewards; prohibition of speculative behavior and excessive uncertainty.

The adviser suggested that Islamic banking and finance should take the lead in bringing about positive changes in the financial system with more emphasis on value-based intermediation and socially responsible investing. Innovations in the use of Islamic financial instruments can go a long way in supporting the SDGs.

Green Sukuk is a unique example of an Islam-based impact investing instrument, which demonstrates how resources from Islamic finance can be used for renewable energy investments. He underlined the strong need for collaboration between universities, Sharia scholars and industry professionals, which can allow synergies while identifying priority research areas. In his concluding remarks, the advisor showed the assurance of the government’s commitment to develop and strengthen the Islamic finance industry in Pakistan.

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He recognized that the involvement of academics and practitioners is vital for the continued progress and advancements of the Islamic financial system. Tarin congratulated The Professionals Network and the Center of Excellence in Islamic Finance, Institute of Business Administration, Karachi for organizing a productive conference, and hoped that the event will prove to be of great significance for Islamic finance. at this time and at this time to stay abreast of the rapidly changing digital landscape.

He hopes that the dialogue, deliberations and offers that will be presented here around the new normal, digital transformation and Islamic economy will be useful for our country and for the global Islamic financial industry.

Courtesy: APP

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