Daily Times

ISLAMABAD: Security and Exchange Commission of Pakistan (SECP) Commissioner Zafar Abdullah Thursday inaugurated a new Islamic finance centre for promotion of Islamic investments at the Abbottabad Sarmayakari Markaz.

As envisioned by the SECP chairman, this is an initiative of the non-bank financial institutions (NBFIs) and the Modaraba Association to expand the reach of regulated Islamic investments.

Speaking on the occasion, Zafar said that the SECP was committed to promoting modarabas as pure Islamic financial institutions. In consultation with stakeholders, he said that the SECP had already reviewed the entire regulatory framework for modarabas and had approved the concept paper for structural reforms to implement the concept of modaraba in its true Islamic spirit.

He told stakeholders that he had advised the modaraba sector to set up a consumer-financing centre in Rawalpindi to provide consumer finance to the public in a regulated form at affordable rates. “The modaraba sector responded overwhelmingly, and four modarabas had established the first Islamic finance centre in Rawalpindi to provide Islamic finance to low-income customers for purchase of motorcycles. Until February 28, 2017, the centre had disbursed Rs 14.97 million to 249 clients.”

In his remarks, NBFIs and Modaraba Association Chairman Ayaz Dawood said the centre would initially focus on providing investor education and awareness about the NBFIs and the modaraba sector, expanding outreach of the association’s members to the public in Abbottabad and its adjoining areas. “Later, the centre will provide public affordable Sharia-compliant financing.” He appreciated the vision the SECP chairman for extending the outreach of modarabas to the general public and broadening the range of Islamic financial products.

Senior officials of the SECP, chief executive officers of modaraba companies and officials of various financial institutions attended the inaugural ceremony.

It may be noted that modaraba is the pioneering form of Islamic finance in Pakistan. At present, it has as many as 80,000 investors – three times more than the number of shareholders in Islamic banks.

According to a statement, the modaraba scam has nothing to do with the regulated modaraba sector and investors interested in Islamic investing are advised to stay away from unregulated investment activities.

The Sarmayakari Markaz in Abbottabad is managed by the Central Depository Company and it already has branch offices of some of the leading investment management companies and brokerage houses.