Tag: SBP

KARACHI: Dr. Reza Baqir, Governor, State Bank of Pakistan (SBP) on Thursday met the Governors of Saudi Central Bank (SCB) and Bank Indonesia (BI) on the sidelines of the 15th Islamic Finance Services Board (IFSB) Summit 2021, hosted by the Saudi Central Bank, in Jeddah.

In separate meetings with the two Governors, various topics of mutual interest related to Islamic Banking, digitalization, open banking, and financial inclusion were discussed.

The Governors shared the vision that digital transformation could play a pivotal role in the expansion of Islamic Finance and help in improving financial inclusion. In the meeting with the Saudi Central Bank Governor, Dr. Baqir thanked the Saudi authorities for the financial support they had recently announced for Pakistan in the form of a deposit at the SBP and oil financing.

Dr. Baqir briefed the Governors of the Saudi Central Bank and Bank Indonesia about the recent initiatives of SBP in the areas of Islamic banking, digitalization, financial inclusion and low-cost housing finance.

While talking about digitalization of the financial sector he said that digitalization is a means to achieve the broader objective of making the financial sector more productive, efficient, and inclusive.

Governor SBP especially highlighted that digitization offers the highest potential to accelerate the pace of financial inclusion. Technology driven solutions are the key to open doors of the financial sector for the unserved and underserved segments of the society, particularly the women.

The Governors also shared their experiences during Covid-19 pandemic. Governor SBP apprised them about the various measures taken by the Government of Pakistan to successfully contain the spread of Covid in Pakistan. He also shared the measures taken by SBP to inject liquidity in the economy and banking sector during Covid that helped save jobs as the country went into a locked down situation.

SBP for digital transformation of Islamic financial services

KARACHI: The State Bank of Pakistan (SBP) has stressed the need of digital transformation of global Islamic financial services for its growth.

Digital transformation of the global Islamic financial Services industry has become a necessity for its growth and it needs to focus on innovative ways of service delivery that aligns with expectations of today’s tech-savvy and convenience-driven customers, SBP governor Dr. Reza Baqir said.

He was speaking at the 15th Islamic Finance Services Board (IFSB) Summit 2021 hosted by the Saudi Central Bank in Jeddah, according to a SBP statement issued on Wednesday.

The theme of the summit was “Islamic Finance and Digital Transformation: Balancing Innovation and Resilience.”

Dr. Reza Baqir, who is the Deputy Chairman of the Council of IFSB, was chairing a session on ‘Digital Transformation of Islamic Financial Services: Opportunities, Challenges and Policy Implications’. Other attendees at the summit included the central bank Governors of Saudi Arabia, UAE, Bahrain, Indonesia, Oman, and Libya.

With fast digitalization happening in the financial landscape, Governor SBP emphasized that the Islamic finance industry also needs to move to digitize their financial services and transform their processes to improve efficiency, reduce intermediation cost and increase outreach to a wider segments of society.

He pointed out that digitalization of Islamic financial services offers tremendous opportunities in achieving a more inclusive financial system for Islamic countries, where a significantly large number of adult population is unbanked than rest of the world.

SBP governor advised that development of Shariah and prudential standards related to fintechs and digital banking, by the international standards setting bodies such as AAOIFI and IFSB, would prove pivotal for the fast-paced development of global Islamic financial industry and recommended to set up a technical working group to specifically work on these standards.

He touched upon the key initiatives taken by State Bank of Pakistan during the last few years on the digital front, especially in the wake of COVID-19 pandemic.

He especially mentioned SBP’s initiatives pertaining to National Payment Systems Strategy, digital on boarding framework to bring banking services to the fingertips of the customers, digital on-boarding of merchants to facilitate the growth of digital payments and Roshan Digital Accounts for providing innovative banking solutions to millions of Non Resident Pakistanis (NRPs).

Other panelists of the session discussed how the digital transformations could benefit and bring significant opportunities for the Islamic finance industry allowing greater accessibility, convenience, speedy payment transactions and operational efficiency.

The panelists also shed light on new regulatory and supervisory challenges for the financial sector regulators posed by technological advancements. Further, they discussed policy implications of digitalization that focuses on maintaining a balance among financial innovation, integrity and stability.

The 15th IFSB Summit 2021 focused on ways to foster innovation, technological adoption, accessibility and sustainability in the Islamic financial system to aid its future growth and development. It also highlighted policy implications arising from rapid digital transformation and the work to be done, going forward, to strengthen its resilience and stability.

The Summit convened together high-level participants from regulatory and supervisory authorities, government officials, commercial institutions offering Islamic financial services, international organizations, multilateral development banks, academics and think tanks.

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