Karachi November 18 2023: The Vision 2028 of the State Bank of Pakistan is centered on six strategic objectives, with the adoption of a Shariah-compliant banking system being a key component.
Governor State Bank of Pakistan (SBP), Mr. Jameel Ahmad, launched SBP’s strategic plan, SBP Vision 2028, for the period 2023-2028 in a ceremony held today at SBP Karachi, which was attended by the senior management of the Bank. SBP Vision 2028, the first plan after amendments in the SBP Act, highlights the central bank’s vision, mission and key goals to be pursued over the next five years.
The strategic plan has been developed through a consultative and inclusive process with key stakeholders. Speaking on the occasion, the Governor SBP highlighted that SBP Vision 2028 represents SBP’s commitment to foster price and financial stability and to contribute in a sustainable economic development of the country. Mr. Ahmad added that evolving risks and challenges to the economy and financial stability, including climate change, rapid digital innovations and disruptions, and growing cyber security threats, have also been kept in perspective while developing the plan.
Governor SBP elaborated that the SBP Vision 2028, revolves around six strategic goals that include maintaining inflation within the medium-term target range, enhancing efficiency, effectiveness, fairness and stability of the financial system, promoting inclusive and sustainable access to financial services, transforming to a Shariah compliant banking system, building an innovative and inclusive digital financial services ecosystem, and transforming SBP into a high-tech, people-centric organization. These strategic goals are built to cover five cross-cutting themes, including: strategic communication, climate change, technological innovation, diversity and inclusion, and productivity and competitiveness.
Transforming to a Shariah-Compliant Banking System
Islamic banking has been a cornerstone of the SBP’s strategic plan. Due to SBP-led initiatives for Islamic banking, including the development of legal, regulatory and supervisory frameworks and promotion of participatory mode of financing, the share of Islamic banking in the overall banking industry has increased manifolds over the years. The market share of Islamic banking assets and deposits has reached around 20 percent and 22 percent respectively and the number of Islamic branches has increased to 4,534 by June 2023. Further, the publication of the third strategic plan for Islamic banking, in consultation with all relevant stakeholders, has provided a strategic vision and direction to the industry.
Strengthen legal and regulatory environment
- Build a conducive legal and regulatory landscape
- Ensure alignment with international prudential standards (IFSB and others)
- Ensure tax neutrality for Islamic banking vis a vis conventional banks
Transform existing conventional banks into Islamic banks
- Design a roadmap for transition towards Islamic banking
- Coordinate with banks for conversion to Islamic banking
- Design solutions/tools for liquidity management for Islamic banks
Strengthen the Shariah Governance Framework (SGF)
- Revise the SGF and adopt best practices
- Ensure alignment with international standards on Shariah
- Strengthen coordination with stakeholders
Conduct market development and research in the field of Islamic financial services
- Increase focus on market development and research Initiatives
Enhance capacity building and awareness
- Capacity building through human resource development and raising awareness about Islamic banking and finance