Dr Shamshad Akhtar, Governor State bank of Pakistan has urged upon the
Islamic Banking Institutions (IBIs) to increase their penetration in rural areas of
the country and diversify their network for the benefit of underserved segment of
the society.
Speaking at a ceremony held in Karachi this afternoon to celebrate the
establishment of 100th branch of Meezan Bank, Dr Akhtar said that she counts on
Islamic banks to enhance their outreach by opening up branches in rural areas and
focus on farm and non-farm based lending. She also spoke about State Bank’s
New Branch Licensing Policy and said that the State Bank has allowed substantial
growth in branch network.
She said the new licensing policy is ‘very liberal’ under which each bank is
required to set up at least 20% of the total branches, under their annual branch
expansion plans, in rural areas for the purpose of enhancing the outreach of
banking services. SBP Governor said under the policy, the State Bank has allowed
microfinance banks to open as many branches as they want in the rural areas.
“Along the same lines, I think Islamic banks may also be allowed to set up
as many branches in rural areas as they want,” the Governor remarked. Dr Akhtar
said that there is also a unique opportunity for Islamic banks to do infrastructure
financing and long-term lending. She also said that rural areas of Pakistan have
great potential of growth and Islamic banking could play a pivotal role in the
development of these areas.
“Rural prosperity has increased over the years and capacity to buy and save
is higher in rural areas,” Dr Akhtar said. She congratulated the management of
Meezan Bank in achieving yet another milestone on top of an impressive growth
over the last five years.
Earlier, Mr Irfan Siddiqui, President and CEO of Meezan Bank in his
welcome address said that Meezan Bank is now operating in 31 cities of the
country and branch expansion will continue during 2008 with an aim to increase
network to150 branches. He said the Bank’s total deposit base is over Rs 52
billion, 42% of total Islamic banking industry, and its financing stands at Rs 30
billion which is 34% of total Islamic banking financing while its total assets are
worth Rs 64 billion or 36% of overall Islamic banking assets in Pakistan..