Central Bank To Outline Islamic Finance Expansion Strategy
News: Pakistan ' s central bank is soon to outline a strategy for expand ing the Islamic banking and finance industry in the country, after consulting a number of important stakeholders, according to Dawn. The State Bank of Pakistan announced that the plans included improvements to legislation, regulation, and taxation - as well as increased diversification of products and services. The central bank added that the sector is likely to double its market share by 2020.
BMI View: Moody's has kept its outlook for Pakistan's banking system at 'negative', citing the industry's high exposure to sovereign credit risk and a challenging domestic operating environment. While we sympathise with these concerns, we believe that a lot has changed in the country over the past few months (e.g. election of fiscally conservative government and movement towards a new IMF programme), and that the outlook for the country's banks is not as grim as the agency portrays in its seemingly static assessment.