Islamic Fund Management
93
4.3 Pakistan
In the 2000s, Pakistan started to implement Islamic finance within a dual financial system.
Since then, the country has been one of the key global players in this sphere. The Pakistan
government has indicated its strong commitment to building sound foundations for Islamic
finance; a Steering Committee for Promotion of Islamic Banking was formed in December 2013
to assess the main challenges facing the industry and come up with recommendations to
address them. In 2015, the Ministry of Finance established an Implementation Committee,
consisting of four sub-committees, i.e. (i) Sub-Committee on Legal & Regulatory Framework;
(ii) Sub-Committee on Taxation; (iii) Sub-Committee on the Islamic Capital Market; and (iv)
Sub-Committee on Awareness & Capacity Building, to execute the recommendations submitted
by the Steering Committee (SBP, 2017).
The selection of Pakistan as a country case study in assessing the development of the Islamic
fund management industry is based on the following:
 Pakistan’s growth in the overall Islamic finance industry at the global level.
 Pakistan is considered a developing market in Islamic finance, representing South Asia.
Its population is 95%-98% dominated by Muslims, which provides a strong untapped
demand base for Shariah-compliant investments.
 Pakistan was ranked number 5 in terms of global assets in Islamic fund management as
at end-2016.
4.3.1 Overview of Pakistan’s Islamic Finance and Islamic Fund Management
Industries
A Snapshot of Pakistan’s Islamic Financial Market Landscape
Pakistan’s financial sector is regulated by three key regulators, i.e. the State Bank of Pakistan
(SBP), the Securities and Exchange Commission of Pakistan (SECP) and the federal
government, as depicted in The banking sector, which includes scheduled banks,
development financial institutions (DFIs), microfinance banks (MFBs), exchange companies
(ECs), payment service providers, and operators of payment and credit bureaus, are regulated
by the SBP. The capital markets, non-bank finance companies (NBFCs) or non-bank financial
institutions (NBFIs), insurance companies, modaraba companies, microfinance institutions and
other corporate entities fall under the purview of the SECP. On the other hand, Pakistan’s
federal government oversees the directorate of national savings (DNS).