Pakistan Developing Shariah-Compliant Products for Money Market

Shariah-compliant products for interbank money market will be developed by the Pakistan’s central bank in order to overcome the shortage of investment options which Islamic lenders are facing.

Acting Governor Yaseen Anwar said the products “will provide some flexible and convenient mechanism for managing the surplus liquidity in the Islamic banking industry,” in addition to “provide a platform for developing benchmarks for the pricing of Islamic finance products.”

The country plans to increase in doubling its Islamic banking industry within the next three years to 12 percent of the size of its conventional one. The strategy would be to increase the number of full-fledged Islamic banks to eight from six by 2013.