Islamabad: The Asian Development Bank (ADB) has shown its willingness to finance billions of dollars in loans to Pakistan under various instruments of Islamic banking.
However, Islamabad has not submitted any formal request to any multilateral institutions. The Director General of the Cambridge Institute of Islamic Banking, Dr. Humayun Dar, said during a literary discussion held here on Monday.
He said that various international institutions want to enter Islamic banking in Pakistan. He added that the Asian Development Bank also showed interest in participating in the Islamic banking sector, adding that the ADB office in Islamabad contacted him a few years ago to inform him of the issue.
The World Bank and the International Monetary Fund are more interested in adopting the Islamic banking structure to deal with Islamic countries, which we would like to emphasize. A few years ago, the country director of (ADB) in Pakistan called and said that there were reports that the government would adopt pro-Islamic banking and that the Asian Development Bank had pledged $10 billion over the next 10 years and the bank was ready to provide financing on the Islamic banking structure.
Subsequently, the government did not submit an application to the Asian Development Bank for a loan on the Islamic banking structure. It is expensive and expensive which is why its loan is more expensive compared to other international institutions.
He said that Iran had made progress in introducing Islamic banking, and declared that additional money collected in public sector institutions could be considered usury. He said Malaysia has made progress as many scholars have opposed their initial moves but have been sticking with the path for several years and are now turning towards Islamic banking. He believed that there was a need to show intentions to move towards Islamic banking and that a wise gradual approach should be adopted to achieve the desired results.
On the issue of default, Dar said that this is an area that Islamic Sharia scholars should consider and provide solutions for Islamic banks. He said Islamic banks should impose fines on defaulters.
Regarding a question about the interest on the loan, he said that it cannot be eliminated because there is no government that wants it in Islamic countries, and added that these governments are influenced by strong pressure groups in banks that do not want it.
He said that there is no justification for charging interest on the loan due to currency devaluation and inflation, adding that these are macroeconomic factors and the borrower cannot be held responsible for these factors.